FAQ

Answer
It is a destination based tax on consumption of goods and services. It is
proposed to be levied at all stages right from manufacture up to final
consumption with credit of taxes paid at previous stages available as setoff.
In a nutshell, only value addition will be taxed and burden of tax is to be
borne by the final consumer.

Q.2. What exactly is the concept of
destination based tax on consumption?

Answer
The tax would accrue to the taxing authority which has jurisdiction over the
place of consumption which is also termed as place of supply.

Q.3. Which of the existing taxes are proposed to be subsumed under
GST?

Answer
The GST would replace the following taxes: (i) taxes currently levied and
collected by the Centre: a. Central Excise duty b. Duties of Excise (Medicinal
and Toilet Preparations) c. Additional Duties of Excise (Goods of Special
Importance) d. Additional Duties of Excise (Textiles and Textile Products) e.
Additional Duties of Customs (commonly known as CVD) f. Special Additional Duty
of Customs (SAD) g. Service Tax h. Central Surcharges and Cesses so far as they
relate to supply of goods and services (ii) State taxes that would be subsumed
under the GST are: a. State VAT b. Central Sales Tax c. Luxury Tax d. Entry Tax
(all forms) e. Entertainment andAmusementTax(exceptwhen levied by the local
bodies) f. Taxes on advertisements g. Purchase Tax h. Taxes on lotteries,
betting and gambling i. StateSurchargesandCesses sofar as theyrelateto supply
of goods and services. The GST Council shall make recommendations to the Union
and States on the taxes, cesses and surcharges levied by the Centre, the States
and the local bodies which may be subsumed in the GST.

Q.4. What principles were adopted for subsuming the above taxes
under GST?

Answer
The various Central, State and Local levies were examined to identify their
possibility of being subsumed under GST. While identifying, the following
principles were kept in mind: (i) Taxes or leviesto be subsumed should be
primarily in the nature of indirect taxes, either on the supply of goods or on
the supply of services. (ii) Taxes or levies to be subsumed should be part of
the transaction chain which commences with import/ manufacture/ production of
goods or provision of services at one end and the consumption of goods and
services at the other. (iii) The subsumation should result in free flow of tax
credit in intra and inter-State levels. The taxes, levies and fees that are not
specifically related to supply of goods & services should not be subsumed
under GST. (v) Revenue fairness for both the Union and the States individually
would need to be attempted

Q.5. Which are the commodities proposed to be kept outside the
purview of GST?

Answer
Article 366(12A) of the Constitution as amended by 101st Constitutional
Amendment Act, 2016 defines the Goods and Services tax (GST) as a tax on supply
of goods or services or both, except supply of alcoholic liquor for human
consumption. So alcohol for human consumption is kept out of GST by way of
definition of GST in constitution. Five petroleum products viz. petroleum
crude, motor spirit (petrol), high speed diesel, natural gas and aviation
turbine fuel have temporarily been kept out and GST Council shall decide the
date from which they shall be included in GST. Furthermore, electricity has
been kept out of GST.

Q.6. What will be the status in respect of taxation of above
commodities after introduction of GST?

Answer
The existing taxation system (VAT & Central Excise) will continue in
respect of the above commodities.

Q.7. What will be status of Tobacco and Tobacco products under the
GST regime?

Answer
Tobacco and tobacco products would be subject to GST. In addition, the Centre
would have the power to levy Central Excise duty on these products.

Q.8. What type of GST is proposed to be implemented?

Answer
It would be a dual GST with the Centre and States simultaneously levying it on
a common tax base. The GST to be levied by the Centre on intra-State supply of
goods and / or services would be called the Central GST (CGST) and that to be
levied by the States/ Union territory would be called the State GST (SGST)/
UTGST. Similarly, Integrated GST (IGST) will be levied and administered by
Centre on every inter-state supply of goods and services.

Q.9. Why is Dual GST required?

Answer
India is a federal country where both the Centre and the States have been
assigned the powersto levy and collect taxes t h r o u g h a p p r o p r i a t
e legislation. Both t h e l e v e l s of Government have distinct
responsibilities to perform according to the division of powers prescribed in
the Constitution for which they need to raise resources. A dual GST will,
therefore, be in keeping with the Constitutional requirement of fiscal
federalism.

Q.10. Which authority will levy and administer GST?

Answer
Centre will levy and administer CGST & IGST while respective states /UTs
will levy and administer SGST/ UTGST.

Q.11. Why was the Constitution of India amended recently in the
context of GST?

Answer
Currently, the fiscal powers between the Centre and the States are clearly
demarcated in the Constitution with almost no overlap between the respective
domains. The Centre has the powers to levy tax on the manufacture of goods
(except alcoholic liquor for human consumption, opium, narcotics etc.) while
the States have the powers to levy tax on the sale of goods. In the case of
inter-State sales, the Centre has the power to levy a tax (the Central Sales
Tax) but, the tax is collected and retained entirely by the States. As for
services, it is the Centre alone that is empowered to levy service tax.
Introduction of the GST required amendments in the Constitution so as to simultaneously
empower the Centre and the States to levy and collect this tax. The
Constitution ofIndia has been amended by the Constitution (one hundred and
first amendment) Act, 2016 for this purpose. Article 246A of the Constitution
empowers the Centre and the States to levy and collect the GST.

Q.12. How a particular transaction of goods and services would be
taxed simultaneously under Central GST (CGST) and State GST (SGST)?

Answer
The Central GST and the State GST would be levied simultaneously on every transaction
of supply of goods and services except the exempted goods and services, goods
which are outside the purview of GST and the transactions which are below the
prescribed threshold limits. Further, both would be levied on the same price or
value unlike State VAT which is levied on the value of the goods inclusive of
CENVAT. While the location of the supplier and the recipient within the country
is immaterial for the purpose of CGST, SGST would be chargeable only when the
supplier and the recipient are both located within the State. Illustration I:
Suppose hypothetically that the rate of CGST is 10% and that of SGST is 10%.
When a wholesale dealer of steel in Uttar Pradesh supplies steel bars and rods
to a construction company which is also located within the same State for, say
Rs. 100, the dealer would charge CGST of Rs. 10 and SGST of Rs. 10 in addition
to the basic price of the goods. He would be required to deposit the CGST
component i n t o a C e n t r a l G o v e r n m e n t a c c o u n t w h i l e
the SGST portion into the account of the concerned State Government. Of course,
he need not actually pay Rs. 20 (Rs. 10 + Rs. 10) in cash as he would be
entitled to setoff this liability against the CGST or SGST paid on his
purchases (say, inputs). But for paying CGST he would be allowed to use only
the credit of CGST paid on his purchases while for SGST he can utilize the
credit of SGST alone. In other words, CGST credit cannot, in general, be used
for payment of SGST. Nor can SGST credit be used for payment of CGST.
Illustration II: Suppose, again hypothetically, that the rate of CGST is 10%
and that of SGST is 10%. When an advertising company located in Mumbai supplies
advertising services to a company manufacturing soap also located within the
State of Maharashtra for, let us say Rs. 100, the ad company would charge CGST
of Rs. 10 as well as SGST of Rs. 10 to the basic value of the service. He would
be required to deposit the CGST component into a Central Government account
while the SGST portion into the account of the concerned State Government. Of
course, he need not again actually pay Rs. 20 (Rs. 10+Rs. 10) in cash as it
would be entitled to set-off this liability against the CGST or SGST paid on
his purchase (say, of inputs such as stationery, office equipment, services of
an artist etc.). But for paying CGST he would be allowed to use only the credit
of CGST paid on its purchase while for SGST he can utilise the credit of SGST
alone. In other words, CGST credit cannot, in general, be used for payment of
SGST. Nor can SGST credit be used for payment of CGST.

Q.13. What are the benefits which the Country will accrue from
GST?

Answer
Introduction of GST would be a very significantstep in the field of indirect
tax reforms in India. By amalgamating a large number of Central and State taxes
into a single tax and allowing set-off of prior-stage taxes, it would mitigate
the ill effects of cascading and pave the way for a common national market. For
the consumers, the biggest gain would be in terms of a reduction in the overall
tax burden on goods, which is currently estimated at 25%-30%. Introduction of
GST would also make our products competitive in the domestic and international
markets. Studies show that this would instantly spur economic growth. There may
also be revenue gain for the Centre and the States due to widening of the tax
base, increase in trade volumes and improved tax compliance. Last but not the
least, this tax, because of its transparent character, would be easier to
administer.

Q.14. What is IGST?

Answer
Under the GST regime, an Integrated GST (IGST) would be levied and collected by
the Centre on inter-State supply of goods and services. Under Article 269A of
the Constitution, the GST on supplies in the course of interState trade or
commerce shall be levied and collected by the Government of India and such tax
shall be apportioned between the Union and the States in the manner as may be
provided by Parliament by law on the recommendations of the Goods and Services
Tax Council.

Q.15. Who will decide rates for levy of GST?

Answer
The CGST and SGST would be levied at rates to be jointly decided by the Centre
and States. The rates would be notified on the recommendations of the GST
Council.

Q.16. What would be the role of GST Council?

Answer
A GST Council would be constituted comprising the Union Finance Minister (who
will be the Chairman of the Council), the Minister of State (Revenue) and the
State Finance/Taxation Ministers to make recommendations to the Union and the
States on (i) the taxes, cesses and surcharges levied by the Centre, the States
and the local bodies which may be subsumed under GST, (ii) the goods and
services that may be subjected to or exempted from the GST, (iii) the date on
which the GST shall be levied on petroleum crude, high speed diesel, motor
sprit (commonly known as petrol), natural gas and aviation turbine fuel, (iv)
modelGSTlaws,principlesoflevy,apportionment of IGST and the principles that
govern the place of supply, (v) the threshold limit of turnover below which the
goods and services may be exempted from GST, (vi) the rates including floor
rates with bands of GST, (vii)any special rate or rates for a specified period
to raise additional resources during any natural calamity or disaster, (viii)
special provision with respect to the NorthEast States, J&K, Himachal
Pradesh and Uttarakhand, and (ix) any other matter relating to the GST, as the
Council may decide.

Q.17. What is the guiding principle of GST Council?

Answer
The mechanism of GST Council would ensure harmonization on different aspects of
GST between the Centre and the States as well as among States. It has been
provided in the Constitution ( one
hundred and first amendment) Act, 2016 that the GST Council, in its discharge
of various functions, shall be guided by the need for a harmonized structure of
GST and for the development of a harmonized national market for goods and
services.

Q.18. How will decisions be taken by GST Council?

Answer
The Constitution (one hundred and first amendment) Act, 2016 provides that every
decision of the GST Council shall be taken at a meeting by a majority of not
less than 3/4th of the weighted votes of the Members present and voting. The
vote of the Central Government shall have a weightage of 1/3rd of the votes
cast and the votes of all the State Governments taken together shall have a
weightage of 2/3rd of the total votes cast in that meeting. One half of the
total number of members of the GST Council shall constitute the quorum at its
meetings.

Q.19. Who is liable to pay GST under the proposed GST regime?

Answer
Under the GST regime, tax is payable by the taxable person on the supply of
goods and/or services. Liability to pay tax arises when the taxable person
crosses the turnover threshold of Rs.20 lakhs (Rs. 10 lakhs for NE & Special
Category States) except in certain specified cases where the taxable person is
liable to pay GST even though he has not crossed the threshold limit. The CGST
/ SGST is payable on all intra-State supply of goods and/or services and IGST
is payable on all inter- State supply of goods and/or services. The CGST /SGST
and IGST are payable at the rates specified in the Schedules to the respective
Acts.

Q.20. What are the benefits available to small tax payers under
the GST regime?

Answer
Tax payers with an aggregate turnover in a financial year upto [Rs.20 lakhs
& Rs.10 Lakhs for NE and special category states] would be exempt from tax.
Further, a person whose aggregate turnover in the preceding financial year is
less than Rs.50 Lakhs can opt for a simplified composition scheme where tax
will payable at a concessional rate on the turnover in a state. [Aggregate
turnover shall include the aggregate value of all taxable supplies, exempt
supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate
turnover shall be computed on all India basis. For NE States and special
category states, the exemption threshold shall be [Rs. 10 lakhs]. All taxpayers
eligible for threshold exemption will have the option of paying tax with input
tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax
on reverse charge basis shall not be eligible for threshold exemption.

Q.21. How will the goods and services be classified under GST
regime?

Answer
HSN (Harmonised System of Nomenclature) code shall be used for classifying the
goods under the GST regime. Taxpayers whose turnover is above Rs. 1.5 crores
but below Rs. 5 crores shall use 2-digit code and the taxpayers whose turnover
is Rs. 5 crores and above shall use 4-digit code. Taxpayers whose turnover is
below Rs. 1.5 crores are not required to mention HSN Code in their invoices.
Services will be classified as per the Services Accounting Code (SAC)

Q.22. How will imports be taxed under GST?

Answer
Imports of Goods and Services will be treated as inter-state supplies and IGST
will be levied on import of goods and services into the country. The incidence
of tax will follow the destination principle and the tax revenue in case of
SGST will accrue to the State where the imported goods and services are
consumed. Full and complete set-off will be available on the GST paid on import
on goods and services.

Q.23. How will Exports be treated under GST?

Answer
Exports will be treated as zero rated supplies. No tax will be payable on
exports of goods or services, however credit of input tax credit will be
available and same will be available as refund to the exporters. The Exporter
will have an option to either pay tax on the output and claim refund of IGST or
export under Bond without payment of IGST and claim refund of Input Tax Credit
(ITC).

Q.24. What is the scope of composition scheme under GST?

Answer
Small taxpayers with an aggregate turnover in a preceding financial year up to
[Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a
taxpayer shall pay tax as a percentage of his turnover in a state during the
year without the benefit of ITC. The rate of tax for CGST and SGST/UTGST shall
not be less than [1% for manufacturer & 0.5% in other cases, 2.5% for
specific services as mentioned in para 6(b) of Schedule II viz Serving of food
or any other article for human consumption]. A tax payer opting for composition
levy shall not collect any tax from his customers. The government may increase
the above said limit of 50 lakhs rupees to up to one crore rupees, on the
recommendation of GST Council. Tax payers making inter- state supplies or
making supplies through ecommerce operators who are required to collect tax at
source shall not be eligible for composition scheme.

Answer
GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle
called the GSTN has been set up to cater to the needs of GST. The GSTN shall
provide a shared IT infrastructure and services to Central and State
Governments, tax payers and other stakeholders for implementation of GST. The
functions of the GSTN would, inter alia, include: (i) facilitating
registration, (ii) forwarding the returns to Central and State authorities,
(iii) computation and settlement of IGST, (iv) matching of tax payment details
with banking network, (v) providing various MIS reports to the Central and the
State Governments based on the tax payer return information, (vi) providing
analysis of tax payers"profile, and (vii) running the matching engine for
matching, reversal and reclaim of input tax credit. The GSTN is developing a
common GST portal and applications for registration, payment, return and MIS/
reports. The GSTN would also be integrating the common GST portal with the
existing tax administration IT systems and would be building interfaces for tax
payers. Further, the GSTN is developing back-end modules like assessment,
audit, refund, appeal etc. for 19 States and UTs (Model II States). The CBEC
and Model I States (15 States) are themselves developing their GST back-end
systems. Integration of GST front-end system with back-end systems will have to
be completed and tested well in advance for making the transition smooth.

Q.27. How are the disputes going to be resolved under the GST
regime?

Answer
The Constitution (one hundred and first amendment) Act, 2016 provides that the
Goods and Services Tax Council shall establish a mechanism to adjudicate any
dispute- (a) between the Government of India and one or more States, or (b)
between the Government of India and any State or States on one side and one or
more other Sates on the other side, or (c) between two or more States, arising
out of the recommendations of the Council or implementation thereof.

Q.28. What is the purpose of Compliance rating mechanism?

Answer
As per Section 149 of the CGST/SGST Act, every registered person shall be
assigned a compliance rating based on the record of compliance in respect of
specified parameters. Such ratings shall also be placed in the public domain. A
prospective client will be able to see the compliance ratings of suppliers and
take a decision as to whether to deal with a particular supplier or not. This
will create healthy competition amongst taxable persons.

Q.29. Whether actionable claims liable to GST?

Answer
As per section 2(52) of the CGST/SGST Act actionable claims are to be
considered as goods. Schedule III read with Section 7 of the CGST/SGST Act
lists the activities or transactions which shall be treated neither as supply
of goods nor supply of services. The Schedule lists actionable claims other
than lottery, betting and gambling as one of such transactions. Thus only
lottery, betting and gambling shall be treated as supplies under the GST
regime. All the other actionable claims shall not be supplies.

Q.30. Whether transaction in securities be taxable in GST?

Answer
Securities have been specifically excluded from the definition of goods as well
as services. Thus, the transaction in securities shall not be liable to GST.

Q.31. What is the concept of Information Return?

Answer
Information return is based on the idea of verifying the compliance levels of
registered persons through information procured from independent third party
sources. As per section 150 of the CGST/SGST Act, many authorities who are
responsible for maintaining records of registration or statement of accounts or
any periodic return or document containing details of payment of tax and other
details of transaction of goods or services or both or transactions related to
a bank account or consumption of electricity or transaction of purchase, sale
or exchange of goods or property or right or interest in a property under any
law for the time being in force, are mandated to furnish an information return
of the same in respect of such periods, within such time, in such form and
manner and to such authority or agency as may be prescribed. Failure to do so
may result in penalty being imposed as per Section 123.

Q.32. Different companies have different types of accounting
software packages and no specific format are mandated for keeping records. How
will department be able to read into these complex software?

Answer
As per Section 153 of the CGST/SGST Act, having regard to the nature and
complexity of a case and in the interest of revenue, department may take
assistance from an expert at any state of scrutiny, inquiry, investigation or
any other proceedings.

Q.33. Is there anyprovision inGST fortax treatment of goods
returned by the recipient?

Answer
Yes, Section 34 deals with such situations. Where the goods supplied are
returned by the recipient, the registered person (supplier of goods) may issue
to the recipient a credit note containing the prescribed particulars. The
details of the credit note shall be declared by the supplier in the returns for
the month during which such credit note was issued but not later than September
following the end of the year in which such supply was made or the date of
filing of the relevant annual return, whichever is earlier. The details of the
credit note shall be matched with the corresponding reduction in claim for
input tax credit by the recipient in his valid return for the same tax period
or any subsequent tax period and the claim for reduction in output tax
liability by the supplier that matches with the corresponding reduction in
claim for ITC by the recipient shall be finally accepted and communicated to
both parties.

Q.34. What is Anti-Profiteering measure?

Answer
As per section 171 of the CGST/SGST Act, any reduction in rate of tax on any
supply of goods or services or the benefit of input tax credit shall be passed
on to the recipient by way of commensurate reduction in prices. An authority
may be constituted by the government to examine whether input tax credits
availed by any registered person or the reduction in the tax rate have actually
resulted in a commensurate reduction in the price of the goods or services or
both supplied by him.

Answer
Article 246A of the Constitution, which was introduced by the Constitution
(101st Amendment) Act, 2016 confers concurrent powers to both, Parliament and
State Legislatures to make laws with respect to GST i. e. central tax (CGST)
and state tax (SGST) or union territory tax (UTGST). However, clause 2 of
Article 246A read with Article 269A provides exclusive power to the Parliament
to legislate with respect to inter-State trade or commerce i.e. integrated tax
(IGST).

Q.2. What is the taxable event under GST?

Answer
Taxable event under GST is supply of goods or services or both. CGST and SGST/
UTGST will be levied on intra-State supplies. IGST will be levied on
inter-State supplies.

Q.3. Whether supplies made without consideration will also come
within the purview of supply under GST?

Answer
Yes, but only those activities which are specified in Schedule I to the CGST
Act / SGST Act. The said provision has been adopted in IGST Act as well as in
UTGST Act also.

Q.4. Will giving away essential commodities by a charitable
institution be taxable activity?

Answer
In order to be a supply which is taxable under GST, the transaction should be
in the course or furtherance of business. As there is no quid pro quo involved
in supply for charitable activities, it is not a supply under GST.

Q.5. Who can notify a transaction to be supply of goods or
services?

Answer
Central Government or State Government, on the recommendations of the GST
Council, can notify an activity to be the supply of goods and not supply of
services or supply of services and not supply of goods or neither a supply of
goods nor a supply of services.

Q.6. What are composite supply and mixed supply? How are these two
different from each other?

Answer
Composite supply is a supply consisting of two or more taxable supplies of
goods or services or both or any combination thereof, which are bundled in
natural course and are supplied in conjunction with each other in the ordinary
course of business and where one of which is a principal supply. For example,
when a consumer buys a television set and he also gets warranty and a
maintenance contract with the TV, this supply is a composite supply. In this
example, supply of TV is the principal supply, warranty and maintenance service
are ancillary. Mixed supply is combination of more than one individual supplies
of goods or services or any combination thereof made in conjunction with each other
for a single price, which can ordinarily be supplied separately. For example, a
shopkeeper selling storage water bottles along with refrigerator. Bottles and
the refrigerator can easily be priced and sold separately.

Q.7. What is the treatment of composite supply and mixed supply
under GST?

Answer
Composite supply shall be treated as supply of the principal supply. Mixed
supply would be treated as supply of that particular goods or services which
attracts the highest rate of tax.

Q.8. Are all goods and services taxable under GST?

Answer
Supplies of all goods and services are taxable except alcoholic liquor for
human consumption. Supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be
taxable with effect from a future date. This date would be notified by the
Government on the recommendations of the GST Council.

Q.9. What is meant by Reverse Charge?

Answer
It means the liability to pay tax is on the recipient of supply of goods and
services instead of the supplier of such goods or services in respect of
notified categories of supply

Q.10. Is the reverse charge mechanism applicable only to services?

Answer
No, reverse charge applies to supplies of both goods and services, as notified
by the Government on the recommendations of the GST Council.

Q.11. What will be the implications in case of receipt of supply
from unregistered persons?

Answer
In case of receipt of supply from an unregistered person, the registered person
who is receiving goods or services shall be liable to pay tax under reverse
charge mechanism.

Q.12. Can any person other than the supplier or recipient be
liable to pay tax under GST?

Answer
Yes, the Central/State government can specify categories of services the tax on
which shall be paid by the electronic commerce operator, if such services are
supplied through it and all the provisions of the Act shall apply to such
electronic commerce operator as if he is the person liable to pay tax in
relation to supply of such services.

Q.13. What is the threshold for opting to pay tax under the
composition scheme?

Answer
The threshold for composition scheme is Rs. 50 Lakhs of aggregate turnover in
the preceding financial year. The benefit of composition scheme can be availed
up to the turnover of Rs. 50 Lakhs in current financial year.

Q.14. What a re the rates of tax for composition scheme?

Answer
There are different rates for different sectors. In normal cases of supplier of
goods (i.e. traders), the composition rate is 0.5 % of the turnover in a State
or Union territory. If the person opting for composition scheme is
manufacturer, then the rate is 1% of the turnover in a State or Union
territory. In case of restaurant services, it is 2.5% of the turnover in a
State or Union territory. These rates are under one Act, and same rate would be
applicable in the other Act also. So, effectively, the composition rates
(combined rate under CGST and SGST/UTGST) are 1%, 2% and 5% for normal
supplier, manufacturer and restaurant service respectively.

Q.15. A person availing composition scheme during a financial year
crosses the turnover of Rs.50 Lakhs during the course of the year i.e. say he
crosses the turnover of Rs.50 Lakhs in December? Will he be allowed to pay tax
under composition scheme for the remainder of the year i.e. till 31st March?

Answer
No. The option availed shall lapse from the day on which his aggregate turnover
during the financial year exceeds Rs.50 Lakhs.

Q.16. Will a taxable person, having multiple registrations, be
eligible to opt for composition scheme only for a f e w o f regist ra t ions ?

Answer
All registered persons having the same Permanent Account Number (PAN) have to
opt for composition scheme. If one registered person opts for normal scheme,
others become ineligible for composition scheme.

Q.17. Can composition scheme be availed of by a manufacturer and a
service supplier?

Answer
Yes, a manufacturer can opt for composition scheme generally. However, a
manufacturer of goods, which would be notified on the recommendations of the
GST Council, cannot opt for this scheme. This scheme is not available for
services sector, except restaurants.

Q.18. Who are not eligible to opt for composition scheme?

Answer
Broadly, five categories of registered person are not eligible to opt for the
composition scheme. These are: (i) supplier of services other than supplier of
restaurant service, (ii) supplier of goods which are not taxable under the CGST
Act/SGST Act/UTGST Act. (iii) an inter-State supplier of goods, (iv) person
supplying goods through an electronic commerce operator, (v) manufacturer of
certain notified goods

Q.20. Can the customer who buys from a registered person who is
under the composition scheme claim composition tax as input tax credit?

Answer
No, customer who buys goods from registered person who is under composition
scheme is not eligible for composition input tax credit because a composition
scheme supplier cannot issue a tax invoice.

Q.21. Can composition tax be collected from customers?

Answer
No, the registered person under composition scheme is not permitted to collect
tax. It means that a composition scheme supplier cannot issue a tax invoice

Q.22. How to compute ?aggregate turnover? to determine eligibility
for composition scheme?

Answer
The methodology to compute aggregate turnover is given in Section 2(6).
Accordingly, "aggregate turnover"means value of all outward supplies
(taxable supplies+exempt supplies+exports + inter-state supplies) of a person
having the same PAN and it excludes taxes levied under central tax (CGST),
State tax (SGST), Union territory tax (UTGST), integrated tax(IGST) and
compensation cess. Also, the value of inward supplies on which tax is payable
under reverse charge is not taken into account for calculation of
"aggregate turnover"

Q.23. What are the penal consequences if a person opts for the
composition scheme in violation of the conditions?

Answer
If a taxable person has paid tax under the composition scheme though he was not
eligible for the scheme then the person would be liable to penalty and the
provisions of section 73 or 74 shall be applicable for determination of tax and
penalty.

Q.24. Does the GST Law empower the Government to exempt supplies
from the levy of GST?

Answer
Yes. In the public interest, the Central or the State Government can exempt
either wholly or partly, on the recommendations of the GST council, the
supplies of goods or services or both from the levy of GST either absolutely or
subject to conditions. Further the Government can exempt, under circumstances
of an exceptional nature, by special order any goods or services or both. It
has also been provided in the SGST Act and UTGST Act that any exemption granted
under CGST Act shall be deemed to be exemption under the said Act.

Q.25. When exemption from whole of tax collected on goods or
services or both has been granted absolutely, can a person pay tax?

Answer
No, the person supplying exempted goods or services or both shall not collect
the tax in excess of the effective rate.

Answer
Registration under Goods and Service Tax (GST) regime will confer following
advantages to the business: "Legally recognized as supplier of goods or
services. "Proper accounting of taxes paid on the input goods or services
which can be utilized for payment of GST due on supply of goods or services or
both by the business. "Legally authorized to collect tax from his
purchasers and pass on the credit of the taxes paid on the goods or services
supplied to purchasers or recipients. "Getting eligible to avail various
other benefits and privileges rendered under the GST laws.

Q.2. Can a person without GST registration claim ITC and collect
tax?

Answer
No, a person without GST registration can neither collect GST from his
customers nor can claim any input tax credit of GST paid by him.

Q.3. What will be the effective date of registration?

Answer
Where the application for registration has been submitted within thirty days
from the date on which the person becomes liable to registration, the effective
date of registration shall be the date on which he became liable for
registration. Where an application for registration has been submitted by the
applicant after thirty days from the date of his becoming liable to
registration, the effective date of registration shall be the date of grant of
registration. In case of a person taking registration voluntarily while being
within the threshold exemption limit for paying tax, the effective date of
registration shall be the date of order of registration.

Q.4. Who are the persons liable to take a Registration under the
Model GST Law?

Answer
As per Section 22 of the CGST/SGST Act 2017, every supplier (including his
agent) who makes a taxable supply i.e. supply of goods and / or services which
are leviable to tax under GST law, and his aggregate turn over in a financial
year exceeds the threshold limit of twenty lakh rupees shall be liable to
register himself in the State or the Union territory of Delhi or Puducherry
from where he makes the taxable supply. In case of eleven special category
states (as mentioned in Art.279A(4)(g) of the Constitution of India), this
threshold limit for registration liability is ten lakh rupees. Besides, Section
24 of the Act mentions certain categories of suppliers, who shall be liable to
take registration even if their aggregate turnover is below the said threshold
limit of 20 lakh rupees. On the other hand, as per Section 23 of the Act, an
agriculturist in respect of supply of his agricultural produce, as also any
person exclusively making supply of non-taxable or wholly exempted goods and/or
services under GST law will not be liable for registration.

Q.5. What is aggregate turnover?

Answer
As per section 2(6) of the CGST/SGST Act "aggregate turnover"includes
the aggregate value of: (i) all taxable supplies, (ii) all exempt supplies,
(iii) exports of goods and/or service, and, (iv) all inter-state supplies of a
person having the same PAN. The above shall be computed on all India basis and
excludes taxes charged under the CGST Act, SGST Act, UTGST Act, and the IGST
Act. Aggregate turnover shall include all supplies made by the Taxable person,
whether on his own account or made on behalf of all his principals. Aggregate
turnover does not include value of supplies on which tax is levied on reverse
charge basis, and value of inward supplies. The value of goods after completion
of job work is not includible in the turnover of the job-worker. It will be
treated as supply of goods by the principal and will accordingly be includible
in the turnover of the Principal.

Q.6. Which are the cases in which registration is compulsory?

Answer
As per Section 24 of the CGST/SGST Act, the following categories of persons
shall be required to be registered compulsorily irrespective of the threshold
limit: i) persons making any inter-State taxable supply, ii) casual taxable
persons, iii) persons who are required to pay tax under reverse charge, iv)
electronic commerce operators required to pay tax under sub-section (5) of
section 9, v) non-resident taxable persons, vi) persons who are required to
deduct tax under section 51, vii) persons who supply goods and/or services on
behalf of other registered taxable persons whether as an agent or otherwise,
viii) Input service distributor (whether or not separately registered under the
Act) ix) persons who are required to collect tax under section 52, x) every
electronic commerce operator xi) every person supplying online information and
data base retrieval services from a place outside India to a person in India,
other than a registered person, and, xii) such other person or class of persons
as may be notified by the Central Government or a State Government on the
recommendations of the Council.

Q.7. What is the time limit for taking a Registration under GST?

Answer
A person should take a Registration, within thirty days from the date on which
he becomes liable to registration, in such manner and subject to such
conditions as is prescribed under the Registration Rules. A Casual Taxable
person and a non-resident taxable person should however apply for registration
at least 5 days prior to commencement of business.

Q.8. If a person is operating in different states, with the same
PAN number, whether he can operate with a single Registration?

Answer
No. Every person who is liable to take a Registration will have to get
registered separately for each of the States where he has a business operation
and is liable to pay GST in terms of Sub-section (1) of Section 22 of the
CGST/SGST Act.

Q.9. Whether a person having multiple business verticals in a
state can obtain for different registrations?

Answer
Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having
multiple business verticals in a State may obtain a separate registration for
each business vertical, subject to such conditions as may be prescribed.

Q.10. Is there a provision for a person to get himself voluntarily
registered though he may not be liable to pay GST?

Answer
Yes. In terms of Sub-section (3) of Section 25, a person, though not liable to
be registered under Section 22 may get himself registered voluntarily, and all
provisions of this Act, as are applicable to a registered taxable person, shall
apply to such person.

Q.11. Is possession of a Permanent Account Number (PAN) mandatory
for obtaining a Registration?

Answer
Yes. As per Section 25(6) of the CGST/SGST Act every person shall have a
Permanent Account Number issued under the Income Tax Act,1961(43 of 1961) in
order to be eligible for grant of registration. However as per the proviso to
the aforesaid section 25(6), a person required to deduct tax under Section 51,
may have, in lieu of a PAN, a Tax Deduction and Collection Account Number
issued under the said Income Tax Act, in order to be eligible for grant of
registration. Also, as per Section 25(7) PAN is not mandatory for a nonresident
taxable person who may be granted registration on the basis of any other
document as maybe prescribed

Q.12. Whether the Department through the proper officer, can
suo-moto proceed to register of a Person under this Act?

Answer
Yes. In terms of sub-section (8) of Section 25, where a person who is liable to
be registered under this Act fails to obtain registration, the proper officer
may, without prejudice to any action which may be taken under this Act, or
under any other law for the time being in force, proceed to register such
person in the manner as is prescribed in the Registration rules.

Q.13. Whether the proper officer can reject an Application for
Registration?

Answer
Yes. In terms of sub-section 10 of section 25 of the CGST/SGST Act, the proper
officer can reject an application for registration after due verification.

Q.15. Is it necessary for the UN bodies to get registration under
GST?

Answer
Yes. In terms of Section 25(9) of the CGST/SGST Act, all notified UN bodies,
Consulate or Embassy of foreign countries and any other class of persons so
notified would be required to obtain a unique identification number (UIN) from
the GST portal. The structure of the said ID would be uniform across the States
in conformity with GSTIN structure and the same will be common for the Centre and
the States. This UIN will be needed for claiming refund of taxes paid on
notified supplies of goods and services received by them, and for any other
purpose as may be notified.

Q.16. What is the responsibility of the taxable person supplying
to UN bodies?

Answer
The taxable supplier supplying to these organizations is expected to mention
the UIN on the invoices and treat such supplies as supplies to another
registered person (B2B) and the invoices of the same will be uploaded by the
supplier.

Q.17. Is it necessary for the Govt. Organization to get
registration?

Answer
A unique identification number (ID) would be given by the respective state tax
authorities through GST portal to Government authorities / PSUs not making
outwards supplies of GST goods (and thus not liable to obtain GST registration)
but are making inter-state purchases.

Q.18. Who is a Casual Taxable Person?

Answer
Casual Taxable Person has been defined in Section 2 (20) of the CGST/SGST Act
meaning a person who occasionally undertakes transactions involving supply of
goods and/or services in the course or furtherance of business, whether as
principal, or agent or in any other capacity, in a State or a Union territory
where he has no fixed place of business.

Q.19. Who is a Non-resident Taxable Person?

Answer
In terms of Section 2(77) of the CGST/SGST Act, a nonresident taxable person
means any person who occasionally undertakes transactions involving supply of
goods and/or services whether as principal or agent or in any other capacity,
but who has no fixed place of business or residence in India.

Q.20. What is the validity period of the Registration certificate
issued to a Casual Taxable Person and non- Resident Taxable person?

Answer
In terms of Section 27(1) read with proviso thereto, the certificate of
registration issued to a "casual taxable person"or a
"non-resident taxable person"shall be valid for a period specified in
the application for registration or ninety days from the effective date of
registration, whichever is earlier. However, the proper officer, at the request
of the said taxable person, may extend the validity of the aforesaid period of
ninety days by a further period not exceeding ninety days.

Q.21. Is there any Advance tax to be paid by a Casual Taxable
Person and Non-resident Taxable Person at the time of obtaining registration
under this Special Category?

Answer
Yes. While a normal taxable person does not have to make any advance deposit of
tax to obtain registration, a casual taxable person or a non-resident taxable
person shall, at the time of submission of application for registration is
required, in terms of Section 27(2) read with proviso thereto, make an advance
deposit of tax in an amount equivalent to the estimated tax liability of such
person for the period for which the registration is sought. If registration is
to be extended beyond the initial period of ninety days, an advance additional
amount of tax equivalent to the estimated tax liability is to be deposited for
the period for which the extension beyond ninety days is being sought.

Q.22. Whether Amendments to the Registration Certificate is
permissible?

Answer
Yes. In terms of Section 28, the proper officer may, on the basis of such
information furnished either by the registrant or as ascertained by him,
approve or reject amendments in the registration particulars within a period of
15 common working days from the date of receipt of application for amendment.
It is to be noted that permission of the proper officer for making amendments
will be required for only certain core fields of information, whereas for the
other fields, the certificate of registration shall stand amended upon
submission of application in the GST common portal.

Answer
Yes. Any Registration granted under this Act may be cancelled by the Proper
Officer, in circumstances mentioned in Section 29 of the CGST/SGST Act. The
proper officer may, either on his own motion or on an application filed, in the
prescribed manner, by the registered taxable person or by his legal heirs, in
case of death of such person, cancel the registration, in such manner and
within such period as may be prescribed. As per the Registration Rules, an
order for cancellation is to be issued within 30 days from the date of receipt
of reply to SCN (in cases where the cancellation is proposed to be carried out
suo moto by the proper officer) or from the date of receipt of application for
cancellation (in case where the taxable person/legal heir applies for such cancellation)

Answer
Yes, the cancellation of registration under one Act (say CGST Act) shall be
deemed to be a cancellation of registration under the other Act (i.e. SGST
Act). (Section 29 (4))

Q.25. Can the proper Officer Cancel the Registration on his own?

Answer
Yes, in certain circumstances specified under section 29(2) of the CGST/SGST
Act, the proper officer can cancel the registration on his own. Such circumstances
include contravention of any of the prescribed provisions of the CGST Act or
the rules made there under, not filing return by a composition dealer for three
consecutive tax periods or non-furnishing of returns by a regular taxpayer for
a continuous period of six months, and not commencing business within six
months from the date of voluntary registration. However, before cancelling the
registration, the proper officer has to follow the principles of natural
justice. (proviso to Section 29(2)(e))

Q.26. What happens when the registration is obtained by means of
willful mis-statement, fraud or suppression of facts?

Answer
In such cases, the registration may be cancelled with retrospective effect by
the proper officer. (Section 29(2)(e))

Q.27. Is there an option to take centralized registration for
services under GST Law?

Answer
No, the tax paper has to take separate registration in every state from where
he makes taxable supplies.

Q.28. If the taxpayer has different business verticals in one
state, will he have to obtain separate registration for each such vertical in
the state?

Answer
No, however the taxpayer has the option to register such separate business
verticals independently in terms of the proviso to Section 25(2) of the CGTST
Act, 2017.

Q.29. Who is an ISD?

Answer
ISD stands for Input Service Distributor and has been defined under Section
2(61) of the CGST/SGST Act. It is basically an office meant to receive tax
invoices towards receipt of input services and further distribute the credit to
supplier units (having the same PAN) proportionately.

Q.30. Will ISD be required to be separately registered other than
the existing tax payer registration?

Answer
Yes, the ISD registration is for one office of the taxpayer which will be
different from the normal registration.

Q.31. Can a tax payer have multiple ISDs?

Answer
Yes. Different offices of a tax payer can apply for ISD registration.

Q.32. What could be the liabilities (in so far as registration is
concerned) on transfer of a business?

Answer
The transferee or the successor shall be liable to be registered with effect
from such transfer or succession and he will have to obtain a fresh
registration with effect from the date of such transfer or succession. (Section
22(3)).

Q.33. Whether all assesses / dealers who are already registered
under existing central excise/service tax/ vat laws will have to obtain fresh
registration?

Answer
No, GSTN shall migrate all such assessees/dealers to the GSTN network and shall
issue a provisional registration certificate with GSTIN number on the appointed
day, which after due verification by the departmental officers within six
months, will be converted into final registration certificate. For converting
the provisional registration to final registration the registrants will be
asked to submit all requisite documents and information required for
registration in a prescribed period of time. Failure to do so will result in
cancellation of the provisional GSTIN number. The service tax assesses having
centralized registration will have to apply afresh in the respective states
wherever they have their businesses.

Q.34. Whether the job worker will have to be compulsorily
registered?

Answer
No, a Job worker is a supplier of services and will be obliged to take
registration only when his turnover crosses the prescribed threshold of 20/10
Lakhs.

Q.35. Whether the goods will be permitted to be supplied from the
place of business of a job worker?

Answer
Yes. But only in cases where the job worker is registered, or if not, the
principal declares the place of business of the job worker as his additional
place of business.

Q.36. At the time of registration will the assessee have to
declare all his places of business?

Answer
Yes. The principal place of business and place of business have been separately
defined under section 2(89) & 2(85) of the CGST/SGST Act respectively. The
taxpayer will have to declare the principal place of business as well as the
details of additional places of business in the registration form.

Q.37. Is there any system to facilitate smaller dealers or dealers
having no IT infrastructure?

Answer
In order to cater to the needs of tax payers who are not IT savvy, following
facilities shall be made available: - Tax Return Preparer(TRP): A taxable
person may prepare his registration application /returns himself or can
approach the TRP for assistance. TRP will prepare the said registration
document / return in prescribed format on the basis of the information
furnished to him by the taxable person. The legal responsibility of the
correctness of information contained in the forms prepared by the TRP will rest
with the taxable person only and the TRP shall not be liable for any errors or
incorrect information. Facilitation Centre (FC): shall be responsible for the
digitization and/or uploading of the forms and documents including summary
sheet duly signed by the Authorized Signatory and given to it by the taxable
person. After uploading the data on common portal using the ID and Password of
FC, a print-out of acknowledgement will be taken and signed by the FC and
handed over to the taxable person for his records. The FC will scan and upload
the summary sheet duly signed by the Authorized Signatory.

Q.38. Is there any facility for digital signature in the GSTN
registration?

Answer
Tax payers would have the option to sign the submitted application using valid
digital signatures. There will be two options for electronically signing the
application or other submissions- by e-signing through Aadhar number, or
through DSC i.e. by registering the tax payer"s digital signature
certificate with GST portal. However, companies or limited liability
partnership entities will have to sign mandatorily through DSC only. Only level
2 and level 3 DSC certificates will be acceptable for signature purpose.

Q.39. What will be the time limit for the decision on the on line
registration application?

Answer
If the information and the uploaded documents are found in order, the State and
the Central authorities shall have to respond to the application within three
common working days. If they communicate any deficiency or discrepancy in the
application within such time, then the applicant will have to remove the
discrepancy / deficiency within 7 days of such communication. Thereafter, for
either approving the application or rejecting it, the State and the Central
authorities will have 7 days from the date when the taxable person communicates
removal of deficiencies. In case no response is given by the departmental
authorities within the said time line, the portal shall automatically generate
the registration.

Q.40. What will be the time of response by the applicant if any
query is raised in the online application?

Answer
If during the process of verification, one of the tax authorities raises some
query or notices some error, the same shall be communicated to the applicant
and to the other tax authority through the GST Common Portal within 3 common
working days. The applicant will reply to the query/rectify the error/ answer
the query within a period of seven days from the date of receipt of deficiency
intimation. On receipt of additional document or clarification, the relevant
tax authority will respond within seven common working days from the date of
receipt of clarification.

Q.41. What is the process of refusal of registration?

Answer
In case registration is refused, the applicant will be informed about the
reasons for such refusal through a speaking order. The applicant shall have the
right to appeal against the decision of the Authority. As per sub-section (2)
of section 26 of the CGST Act, any rejection of application for registration by
one authority (i.e. under the CGST Act / SGST Act) shall be deemed to be a
rejection of application for registration by the other tax authority (i.e.
under the SGST Act / UTGST Act/ CGST Act).

Q.42. Will there be any communication related to the application
disposal?

Answer
The applicant shall be informed of the fact of grant or rejection of his
registration application through an e-mail and SMS by the GST common portal. Jurisdictional
details would be intimated to the applicant at this stage.

Q.43. Can the registration certificate be downloaded from the GSTN
portal?

Answer
In case registration is granted, applicant can download the Registration
Certificate from the GST common portal.

Q.44. Can cancellation of registration order be revoked?

Answer
Yes, but only in cases where the initial cancellation has been done by the
proper officer suo moto, and not on the request of the taxable person or his
legal heirs. A person whose registration has been cancelled suo moto can apply
to the proper officer for revocation of cancellation of registration within 30
days from the date of communication of the cancellation order. The proper
officer may within a period of 30 days from the date of receipt of application
for revocation of cancellation or receipt of information/clarification, either
revoke the cancellation or reject the application for revocation of
cancellation of registration.

Q.45. Does cancellation of registration impose any tax obligations
on the person whose registration is so cancelled?

Answer
Yes, as per Section 29(5) of the CGST/SGST Act, every registered taxable person
whose registration is cancelled shall pay an amount, by way of debit in the
electronic cash ledger, equivalent to the credit of input tax in respect of
inputs held in stock and inputs contained in semi-finished or finished goods
held in stock or capital goods or plant and machinery on the day immediately
preceding the date of such cancellation or the output tax payable on such
goods, whichever is higher.

Q.46. What is the difference between casual and nonresident
taxable persons?

Answer
Casual and Non-resident taxable persons are separately defined in the CGST/SGST
Act in Sections 2(20) and 2(77) respectively. Some of the differences are
outlined below:

Casual Taxable Person

Non-resident Taxable Person

Occasional undertakes transactions involving supply of goods
or services in a state or UT where he has no fixed place of business.

Occasional undertakes transactions involving supply of goods
or services but has no fixed place of business residence in India.

Has a PAN Number

Do not have a PAN Number; A non- resident person, if having
PAN number may take registration as a casual taxable person

Same application form for registration as for normal taxable
persons viz GST REG- 01

Answer
The taxable event under GST shall be the supply of goods or services or both
made for consideration in the course or furtherance of business. The taxable
events under the existing indirect tax laws such as manufacture, sale, or
provision of services shall stand subsumed in the taxable event known as
"supply"

Q.2. What is the scope of ?supply? under the GST law?

Answer
The term "supply"is wide in its import covers all forms of supply of
goods or services or both that includes sale, transfer, barter, exchange,
license, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business. It also
includes import of service. The model GST law also provides for including
certain transactions made without consideration within the scope of supply.

Q.3. What is a taxable supply?

Answer
A "taxable supply"means a supply of goods or services or both which
is chargeable to goods and services tax under the GST Act.

Q.4. What are the necessary elements that constitute supply under
CGST/SGST Act?

Answer
In order to constitute a "supply", the following elements are
required to be satisfied, i.e.- (i) t h e a c t i v i t y i n v o l v e s
supply of goods or services or both, (ii) the supply is for a consideration
unless otherwise specifically provided for, (iii) the supply is made in the
course or furtherance of business, (iv) t h e supply is made in the taxable
territory, (v) the supply is a taxable supply, and (vi) t h e supply is made by
a taxable person.

Q.5. Can a transaction in which any one or more of the above
criteria is not fulfilled, be still considered as supply under GST?

Answer
Yes. Under certain circumstances such as import of services for a consideration
whether or not in the course or furtherance of business (Section 3(1) (b)) or
supplies made without consideration, specified under Schedule-I of CGST /SGST
Act, where one or more ingredients specified in answer to question no.4 are not
satisfied, it shall still be treated as supply for levy of GST

Q.6. Import of Goods is conspicuous by its absence in Section 3.
Why?

Answer
Import of goods is dealt separately under the Customs Act, 1962, wherein IGST
shall be levied as additional duty of customs in addition to basic customs duty
under the Customs Tariff Act, 1975.

Q.7. Are self-supplies taxable under GST?

Answer
Inter-state self-supplies such as stock transfers, branch transfers or
consignment sales shall be taxable under IGST even though such transactions may
not involve payment of consideration. Every supplier is liable to register
under the GST law in the State or Union territory from where he makes a taxable
supply of goods or services or both in terms of Section 22 of the model GST
law. However, intra-state self-supplies are not taxable subject to not opting
for registration as business vertical.

Q.8. Whether transfer of title and/or possession is necessary for
a transaction to constitute supply of goods?

Answer
Title as well as possession both have to be transferred for a transaction to be
considered as a supply of goods. In case title is not transferred, the
transaction would be treated as supply of service in terms of Schedule II (1)
(b). In some cases, possession may be transferred immediately but title may be
transferred at a future date like in case of sale on approval basis or hire
purchase arrangement. Such transactions will also be termed as supply of goods.

Q.9. What do you mean by ?supply made in the course or furtherance
of business??

Answer
"Business"is defined under Section 2(17) include any trade, commerce,
manufacture, profession, vocation etc. whether or not undertaken for a
pecuniary benefit. Business also includes any activity or transaction which is
incidental or ancillary to the aforementioned listed activities. In addition,
any activity undertaken by the Central Govt. or a State Govt. or any local
authority in which they are engaged as public authority shall also be construed
as business. From the above, it may be noted that any activity undertaken
included in the definition for furtherance or promoting of a business could
constitute a supply under GST law.

Q.10. An individual buys a car for personal use and after a year
sells it to a car dealer. Will the transaction be a supply in terms of
CGST/SGST Act? Give reasons for the answer

Answer
No, because supply is not made by the individual in the course or furtherance
of business. Further, no input tax credit was admissible on such car at the
time of its acquisition as it was meant for non-business use.

Q.11. A dealer of air-conditioners p e r m a n e n t l y transfers
an air conditioner from his stock in trade, for personal use at his residence.
Will the transaction constitute a supply?

Answer
Yes. As per Sl. No.1 of Schedule-I, permanent transfer or disposal of business
assets where input as credit has been availed on such assets shall constitute a
supply under GST even where no consideration is involved.

Q.12. Whether provision of service or goods by a club or
association or society to its members will be treated as supply or not?

Answer
Yes. Provision of facilities by a club, association, society or any such body
to its members shall be treated as supply. This is included in the definition
of "business"in section 2(17) of CGST/SGST Act.

Answer
Inter-state and intra-state supplies have specifically been defined in Section
7(1), 7(2) and 8(1), 8(2) of the IGST Act respectively. Broadly, where the
location of the supplier and the place of supply are in same state it will be
intrastate and where it is in different states it will be inter-state supplies.

Q.15. Whether transfer of right to use goods will be treated as
supply of goods or supply of service? Why?

Answer
Transfer of right to use goods shall be treated as supply of service because
there is no transfer of title in such supplies. Such transactions are
specifically treated as supply of service in Schedule-II of CGST/SGST Act.

Q.16. Whether Works contracts and Catering services will be
treated as supply of goods or supply of services? Why?

Answer
Works contracts and catering servicesshall be treated as supply of services as
both are specified under Sl. No. 6 (a) and (b) in Schedule-II of the model GST
law.

Q.17. Whether supply of software would be treated as supply of
goods or supply of services under GST law?

Q.18. Whether goods supplied on hire purchase basis will be
treated as supply of goods or supply of services? Why?

Answer
Supply of goods on hire purchase shall be treated as supply of goods as there
is transfer of title, albeit at a future date

Q.19. What is a Composite Supply under CGST/ SGST/UTGST Act?

Answer
Composite Supply means a supply made by a taxable person to a recipient
comprising two or more supplies of goods or services, or any combination
thereof, which are naturally bundled and supplied in conjunction with each
other in the ordinary course of business, one of which is a principal supply.
For example, where goods are packed and transported with insurance, the supply
of goods, packing materials, transport and insurance is a composite supply and
supply of goods is the principal supply

Q.20. How will tax liability on a composite supply be determined
under GST?

Answer
A composite supply comprising two or more supplies, one of which is a principal
supply, shall be treated as a supply of such principal supply.

Q.21. What is a mixed supply?

Answer
Mixed Supply means two or more individual supplies of goods or services or any
combination thereof, made in conjunction with each other by a taxable person
for a single price where such supply does not constitute a composite supply.
For example, a supply of package consisting of canned foods, sweets,
chocolates, cakes, dry fruits, aerated drink and fruit juice when supplied for
a single price is a mixed supply. Each of these items can be supplied
separately and it is not dependent on any other. It shall not be a mixed supply
if these items are supplied separately.

Q.22. How will tax liability on a mixed supply be determined under
GST?

Answer
A mixed supply comprising two or more supplies shall be treated as supply of
that particular supply which attracts the highest rate of tax

Q.23. Are there any activities which are treated as neither a
supply of goods nor a supply of services?

Answer
Yes. Schedule-III of the model GST law lists certain activities such as (i)
services by an employee to the employer in the course of or in relation to his
employment, (ii) services by any Court or Tribunal established under any law,
(iii) functions performed by members of Parliament, State Legislatures, members
of the local authorities, Constitutional functionaries (iv) services of
funeral, burial, crematorium or mortuary and (v) sale of land and (vi),
actionable claims other than lottery, betting and gambling shall be treated
neither a supply of goods or supply of services.

Q.25. Will import of services without consideration be taxable
under GST?

Answer
As a general principle, import of services without consideration will not be
considered as supply under GST in terms of Section 3. However, import of
services by a taxable person from a related person or from any of his other
establishments outside India, in the course or furtherance of business, even
without consideration will be treated as supply in terms of Sl. No.4 of
Schedule I.

Answer
The time of supply fixes the point when the liability to charge GST arises. It
also indicates when a supply is deemed to have been made. The CGST/SGST Act
provides separate time of supply for goods and services

Q.2. When does the liability to pay GST arise in respect of supply
of goods and Services?

Answer
Section12 & 13 of the CGST/SGST Act provides for time of supply of goods.
The time of supply of goods shall be the earlier of the following namely, (i)
the date of issue of invoice by the supplier or the last date on which he is
required under Section 31, to issue the invoice with respect to the supply, or
(ii) the date on which the supplier receives the payment with respect to the
supply.

Q.3. What is time of supply in case of supply of vouchers in
respect of goods and services?

Answer
The time of supply of voucher in respect of goods and services shall be, a) the
date of issue of voucher, if the supply is identifiable at that point, or b)
the date of redemption of voucher in all other cases

Q.4. Where it is not possible to determine the time of supply in
terms of sub-section 2, 3, 4of Section 12 or that of Section 13 of CGST/SGST
Act, how will time of supply be determined?

Answer
There is a residual entry in Section 12(5) as well as 13 (5) which says that if
periodical return has to be filed, then the due date of filing of such
periodical return shall be the time of supply. In other cases, it will be the
date on which the CGST/SGST/IGST is actually paid.

Q.5. What does ?date of receipt of payment? mean?

Answer
It is the earliest of the date on which the payment is entered in the books of
accounts of the supplier or the date on which the payment is credited to his
bank account.

Q.6. Suppose, part advance payment is made or invoice issued is
for part payment, whether the time of supply will cover the full supply?

Answer
No. The supply shall be deemed to have been made to the extent it is covered by
the invoice or the part payment.

Q.7. What is the time of supply of goods in case of tax payable
under reverse charge?

Answer
The time of supply will be the earliest of the following dates: a) date of
receipt of goods, or b) date on which payment is made, or c) the date
immediately following 30 days from the date of issue of invoice by the
supplier.

Q.8. What is the time of supply of service in case of tax payable
under reverse charge?

Answer
The time of supply will be the earlier of the following dates: a) date on which
payment is made, or b) the date immediately following sixty days from the date
of issue of invoice by the supplier.

Q.9. What is the time of supply applicable with regard to addition
in the value by way of interest, late fee or penalty or any delayed payment of
consideration?

Answer
The time of supply with regard to an addition in value on account of interest,
late fee or penalty or delayed consideration shall be the date on which the
supplier receipts such additional consideration.

Q.10. Is there any change in time of supply, where supply is
completed prior to or after change in rate of tax?

Answer
Yes. In such cases provisions of Section 14 will apply.

Q.11. What is the time of supply, where supply is completed prior
to change in rate of tax?

Answer
In such cases time of supply will be (i) where the invoice for the same has
been issued and the payment is also received after the change in rate of tax,
the time of supply shall be the date of receipt of payment or the date of issue
of invoice, whichever is earlier, or (ii) where the invoice has been issued
prior to change in rate of tax but the payment is received after the change in
rate of tax, the time of supply shall be the date of issue of invoice, or (iii)
where the payment is received before the change in rate of tax, but the invoice
for the same has been issued after the change in rate of tax, the time of
supply shall be the date of receipt of payment,

Q.12. What is the time of supply, where supply is completed after
to change in rate of tax?

Answer
In such cases time of supply will be (i) where the payment is received after
the change in rate of tax but the invoice has been issued prior to the change
in rate of tax, the time of supply shall be the date of receipt of payment, or
(ii) where the invoice has been issued and the payment is received before the
change in rate of tax, the time of supply shall be the date of receipt of
payment or date of issue of invoice, whichever is earlier, or (iii) where the
invoice has been issued after the change in rate of tax but the payment is
received before the change in rate of tax, the time of supply shall be the date
of issue of invoice

Q.13. Let?s say there was increase in tax rate from 18% to 20%
w.e.f.1.6.2017. What is the tax rate applicable when services provided and
invoice issued before change in rate in April 2017, but payment received after
change in rate in June2017?

Answer
The old rate of 18% shall be applicable as services are provided prior to
1.6.2017.

Q.14. Let?s say there was increase in tax rate from 18% to 20%
w.e.f. 1.6.2017. What is the tax rate applicable when goods are supplied and
invoice issued after change in rate in June 2017, but full advance payment was
already received in April 2017?

Q.15. What is the time period within which invoice has to be
issued for supply of Goods?

Answer
As per Section 28 of CGST/SGST Act a registered taxable person shall issue a
tax invoice showing description, quantity and value of goods, tax charged
thereon and other prescribed particulars, before or at the time of (a) removal
of goods for supply to the recipient, where supply involves movement of goods
or (b) delivery of goods or making available thereof to the recipient in other
cases.

Q.16. What is the time period within which invoice has to be
issued for supply of Services?

Answer
As per Section 28 of CGST/SGST Act a registered taxable person shall, before or
after the provision of service, but within a period prescribed in this behalf,
issue a tax invoice showing description, value of goods, tax payable thereon
and other prescribed particulars.

Q.17. What is the time period within which invoice has to be
issued in a case involving continuous supply of goods?

Answer
In case of continuous supply of goods, where successive statements of accounts
or successive payments are involved, the invoice shall be issued before or at
the time each such statement is issued or, as the case may be, each such
payment is received.

Q.18. What is the time period within which invoice has to be
issued in a case involving continuous supply of services?

Answer
In case of continuous supply of services, (a) where the due date of payment is
ascertainable from the contract, the invoice shall be issued before or after
the payment is liable to be made by the recipient but within a period
prescribed in this behalf whether or not any payment has been received by the
supplier of the service, (b) where the due date of payment is not ascertainable
from the contract, the invoice shall be issued before or after each such time
when the supplier of service receives the payment but within a period
prescribed in this behalf, (c) where the payment is linked to the completion of
an event, the invoice shall be issued before or after the time of completion of
that event but within a period prescribed in this behalf.

Q.19. What is the time period within which invoice has to be
issued where the goods being sent or taken on approval for sale?

Answer
The invoice in respect of goods sent or taken on approval for sale or return
shall be issued before or at the time of supply or six months from the date of
approval, whichever is earlier

Q.1. What is the value of taxable supply to be adopted for the
levy of GST?

Answer
The value of taxable supply of goods and services shall ordinarily be "the
transaction value"which is the price paid or payable, when the parties are
not related and price is the sole consideration. Section 15 of the CGST/SGST
Act further elaborates various inclusions and exclusions from the ambit of
transaction value. For example, the transaction value shall not include
refundable deposit, discount allowed subject to certain conditions before or at
the time of supply.

Q.2. What is transaction value?

Answer
Transaction value refers to the price actually paid or payable for the supply
of goods and or services where the supplier and the recipient are not related
and price is the sole consideration for the supply. It includes any amount
which the supplier is liable to pay but which has been incurred by the
recipient of the supply.

Q.3. Are there separate valuation provisions for CGST, SGST and
IGST and for Goods and Services?

Answer
No, section 15 is common for all three taxes and also common for goods and
services.

Q.4. Is contract price not sufficient to determine valuation of
supply?

Answer
Contract price is more specifically referred to as "transaction
value"and that is the basis for computing tax. However, when the price is
influenced by factors like relationship of parties or where certain
transactions are deemed to be supply, which do not have a price, the value has
to be determined in accordance with the GST Valuation Rules.

Q.5. Is reference to GST Valuation Rules required in all cases?

Answer
No. Reference to GST Valuation Rules is required only in cases where value
cannot be determined under subsection (1) of Section 15.

Q.6. Can the transaction value declared under section 15(1) be
accepted?

Answer
Yes, it can be accepted after examining for inclusions in section 15(2).
Furthermore, the transaction value can be accepted even where the supplier and
recipient are related, provided the relationship has not influenced the price.

Q.7. Whether post-supply discounts or incentives are to be
included in the transaction value?

Answer
Yes. where the post-supply discount is established as per the agreement which
is known at or before the time of supply and where such discount specifically
linked to the relevant invoice and the recipient has reversed input tax credit
attributable to such discount, the discount is allowed as admissible deduction
under Section 15 of the model GST law.

Q.8. Whether pre-supply discounts allowed before or at the time of
supply are includible in the transaction value?

Answer
No, provided it is allowed in the course of normal trade practice and has been
duly recorded in the invoice.

Q.9. When are the provisions of the Valuation Rules applicable?

Answer
Valuation Rules are applicable when (i) consideration either wholly or in part
not in money terms, (ii) parties are related or supply by any specified
category of supplier, and (iii) transaction value declared is not reliable.

Q.10. What are the inclusions specified in Section 15(2) which
could be added to Transaction Value?

Answer
The inclusions specified in Section15 (2) which could be added to transaction
value are as follows: a) Any taxes, duties, cesses, fees and charges levied
under any statute, other than the SGST/CGST Act and the Goods and Services Tax
(Compensation to the States for Loss of Revenue) Act, 2016, if charged
separately by the supplier to the recipient, b) Any amount that the supplier is
liable to pay in relation to such supply but which has been incurred by the
recipient of the supply and not included in the price actually paid or payable
for the goods and/or services, c) Incidental expenses, such as commission and
packing, charged by the supplier to the recipient of a supply, including any
amount charged for anything done by the supplier in respect of the supply of
goods and/or services at the time of, or before delivery of the goods or as the
case may be supply of the services, d) Interest or late fee or penalty for
delayed payment of any consideration for any supply, and e) Subsidies directly
linked to the price excluding subsidies provided by the Central and State
Government.

Answer
In the GST regime, for any intra-state supply, taxes to be paid are the Central
GST (CGST), going into the account of the Central Government) and the State/UT
GST (SGST, going into the account of the concerned State Government). For any
inter-state supply, tax to be paid is Integrated GST (IGST) which will have
components of both CGST and SGST. In addition, certain categories of registered
persons will be required to pay to the government account Tax Deducted at
Source (TDS) and Tax Collected at Source (TCS). In addition, wherever
applicable, Interest, Penalty, Fees and any other payment will also be required
to be made

Q.2. Who is liable to pay GST?

Answer
In general, the supplier of goods or services is liable to pay GST. However, in
specified cases like imports and other notified supplies, the liability may be
cast on the recipient under the reverse charge mechanism. Further, in some
notified cases of intra-state supply of services, the liability to pay GST may
be cast on e-commerce operators through which such services are supplied. Also
Government Departments making payments to vendors above a specified limit [2.5
lakh under one contract as per S.51(1)(d)] are required to deduct tax (TDS) and
E-commerce operators are required to collect tax (TCS) on the net value [i.e.
aggregate value of taxable supplies of goods and/or services but excluding such
value of services on which the operator is made liable to pay GST under Section
9(5) of the CGST Act, 2017] of supplies made through them and deposit it with
the Government.

Q.3. When does liability to pay GST arises?

Answer
Liability to pay arises at the time of supply of Goods as explained in Section
12 and at the time of supply of services as explained in Section13. The time is
generally the earliest of one of the three events, namely receiving payment,
issuance of invoice or completion of supply. Different situations envisaged and
different tax points have been explained in the aforesaid sections.

Q.4. What are the main features of GST payment process?

Answer
The payment processes under GST Act(s) have the following features:
"Electronically generated challan from GSTN Common Portal in all modes of
payment and no use of manually prepared challan, "Facilitation for the tax
payer by providing hassle free, anytime, anywhere mode of payment of tax,
"Convenience of making payment online, "Logical tax collection data
in electronic format, "Faster remittance of tax revenue to the Government
Account, "Paperless transactions, "Speedy Accounting and reporting,
"Electronic reconciliation of all receipts, "Simplified procedure for
banks "Warehousing of Digital Challan.

Q.5. How can payment be done?

Answer
Payment can be done by the following methods: (i) Through debit of Credit
Ledger of the tax payer maintained on the Common Portal "ONLY Tax can be
paid. Interest, Penalty and Fees cannot be paid by debit in the credit ledger.
Tax payers shall be allowed to take credit of taxes paid on inputs (input tax
credit) and utilize the same for payment of output tax. However, no input tax
credit on account of CGST shall be utilized towards payment of SGST and vice
versa. The credit of IGST would be permitted to be utilized for payment of
IGST, CGST and SGST in that order. (ii) In cash by debit in the Cash Ledger of
the tax payer maintained on the Common Portal. Money can be deposited in the
Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit
Card, Debit Card), Real Time Gross Settlement (RTGS)/ National Electronic Fund
Transfer (NEFT), Over the Counter Payment in branches of Banks Authorized to
accept deposit of GST

Q.6. When is payment of taxes to be made by the Supplier?

Answer
Payment of taxes by the normal tax payer is to be done on monthly basis by the
20th of the succeeding month. Cash payments will be first deposited in the Cash
Ledger and the tax payer shall debit the ledger while making payment in the
monthly returns and shall reflect the relevant debit entry number in his
return. As mentioned earlier, payment can also be debited from the Credit Ledger.
Payment of taxes for the month of March shall be paid by the 20th of April.
Composition tax payers will need to pay tax on quarterly basis.

Q.7. Whether time limit for payment of tax can be extended or paid
in monthly installments?

Answer
No, this is not permitted in case of self-assessed liability. In other cases,
competent authority has been empowered to extend the time period or allow
payment in instalments. (Section 80 of the CGST/SGST Act).

Q.8. What happens if the taxable person files the return but does
not make payment of tax?

Answer
In such cases, the return is not considered as a valid return. Section 2(117)
defines a valid return to mean a return furnished under sub-section (1) of
section 39 on which self-assessed tax has been paid in full. It is only the
valid return that would be used for allowing input tax credit (ITC) to the
recipient. In other words, unless the supplier has paid the entire
self-assessed tax and filed his return and the recipient has filed his return,
the ITC of the recipient would not be confirmed.

Q.9. Which date is considered as date of deposit of the tax dues ?
Date of presentation of cheque or Date of payment or Date of credit of amount
in the account of government?

Answer
It is the date of credit to the Government account

Q.10. What are E-Ledgers?

Answer
Electronic Ledgers or E-Ledgers are statements of cash and input tax credit in
respect of each registered taxpayer. In addition, each taxpayer shall also have
an electronic tax liability register. Once a taxpayer is registered on Common
Portal (GSTN), two e-ledgers (Cash &Input Tax Credit ledger) and an
electronic tax liability register will be automatically opened and displayed on
his dash board at all times.

Q.11. What is a tax liability register?

Answer
Tax Liability Register will reflect the total tax liability of a taxpayer
(after netting) for the particular month.

Q.12. What is a Cash Ledger?

Answer
The cash ledger will reflect all deposits made in cash, and TDS/TCS made on
account of the taxpayer. The information will be reflected on real time basis.
This ledger can be used for making any payment on account of GST.

Q.13. What is an ITC Ledger?

Answer
Input Tax Credit as self-assessed in monthly returns will be reflected in the
ITC Ledger. The credit in this ledger can be used to make payment of TAX ONLY
and not other amounts such as interest, penalty, fees etc.

Q.14. What is the linkage between GSTN and the authorized Banks?

Answer
There will be real time two-way linkage between the GSTN and the Core Banking
Solution (CBS) of the Bank. CPIN is automatically routed to the Bank via
electronic string for verification and receiving payment and a challan
identification number (CIN) is automatically sent by the Bank to the Common
Portal confirming payment receipt. No manual intervention will be involved in
the process by any one including bank cashier or teller or the tax payer.

Q.15. Can a tax payer generate challan in multiple sittings?

Answer
Yes, a taxpayer can partially fill in the challan form and temporarily
"save"the challan for completion at a later stage. A saved challan
can be "edited"before finalization. After the tax payer has finalized
the challan, he will generate the challan, for use of payment of taxes. The
remitter will have option of printing the challan for his record.

Q.16. Can a challan generated online be modified?

Answer
No. After logging into GSTN portal for generation of challan, payment
particulars have to be fed in by the tax payer or his authorized person. He can
save the challan midway for future updation. However once the challan is
finalized and CPIN generated, no further changes can be made to it by the
taxpayer.

Q.17. Is there a validity period of challan?

Answer
Yes, a challan will be valid for fifteen days after its generation and
thereafter it will be purged from the System. However, the tax payer can
generate another challan at his convenience

Q.18. What is a CPIN?

Answer
CPIN stands for Common Portal Identification Number (CPIN) given at the time of
generation of challan. It is a 14-digit unique number to identify the challan.
As stated above, the CPIN remains valid for a period of 15 days.

Q.19. What is a CIN and what is its relevance?

Answer
CIN stands for Challan Identification Number. It is a 17-digit number that is
14-digit CPIN plus 3-digit Bank Code. CIN is generated by the authorized banks/
Reserve Bank of India (RBI) when payment is actually received by such
authorized banks or RBI and credited in the relevant government account held
with them. It is an indication that the payment has been realized and credited
to the appropriate government account. CIN is communicated by the authorized
bank to taxpayer as well as to GSTN.

Q.20. What is the sequence of payment of tax where thattaxpayer
has liabilities for previous months also?

Answer
Section 49(8) prescribes an order of payment where the taxpayer has tax
liability beyond the current return period. In such a situation, the order of
payment to be followed is: First self-assessed tax and other dues for the
previous period, thereafter self-assessed tax and ot her du es for the current
period, and thereafter any other amounts payable including any confirmed
demands under section 73 or 74. This sequence has to be mandatorily followed.

Q.21. What does the expression ?Other dues? referred to above
mean?

Answer
The expression "other dues"means interest, penalty, fee or any other
amount payable under the Act or the rules made thereunder

Q.22. What is an E-FPB?

Answer
E-FPB stands for Electronic Focal Point Branch. These are branches of
authorized banks which are authorized to collect payment of GST. Each
authorized bank will nominate only one branch as its E-FPB for pan India
Transactions. The E-FPB will have to open accounts under each major head for
all governments. Total 38 accounts (one each for CGST, IGST and one each for
SGST for each State/UT Govt.) will have to be opened. Any amount received by
such E-FPB towards GST will be credited to the appropriate account held by such
EFPB.

Q.24. How will the Supplier account for this TDS? while filing his
return?

Answer
Any amount shown as TDS will be reflected in the electronic cash ledger of the
concerned supplier. He can utilize this amount towards discharging his
liability towards tax, interest fees and any other amount.

Q.25. How will the TDS Deductor account for such TDS?

Answer
TDS Deductor will account for such TDS in the following ways: 1. Such deductors
needs to get compulsorily registered under section 24 of the CGST/SGST Act. 2.
They need to remit such TDS collected by the 10th day of the month succeeding
the month in which TDS was collected and reported in GSTR 7. 3. The amount
deposited as TDS will be reflected in the electronic cash ledger of the
supplier. 4. They need to issue certificate of such TDS to the deductee within
5 days of deducting TDS failing which fees of Rs. 100 per day subject to
maximum of Rs. 5000/- will be payable by such deductor.

Q.26. What is Tax Collected at Source (TCS)?

Answer
This provision is applicable only for E-Commerce Operator under section 52 of
CGST/SGST Act. Every ECommerce Operator, not being an agent, needs to withhold
an amount calculated at the rate not exceeding one percent of the "net
value of taxable supplies"made through it where the consideration with
respect to such supplies is to be collected by the operator. Such withheld
amount is to be deposited by such E-Commerce Operator to the appropriate GST
account by the 10th of the next month. The amount deposited as TCS will be
reflected in the electronic cash ledger of the supplier.

Q.27. What does the expression ?Net value of taxable supplies?
mean?

Answer
The expression "net value of taxable supplies"means the aggregate
value of taxable supplies of goods or services, other than services notified
under Section 9(5), made during any month by all registered taxable persons
through the operator reduced by the aggregate value of taxable supplies
returned to the suppliers during the said month.

Q.28. Is the pre-registration of credit card necessary in the GSTN
portal for the GST payment?

Answer
Yes. The taxpayer would be required to pre-register his credit card, from which
the tax payment is intended, with the Common Portal maintained on GSTN. GSTN
may also attempt to put in a system with banks in getting the credit card
verified by taking a confirmation from the credit card service provider. The
payments using credit cards can therefore be allowed without any monetary limit
to facilitate ease of doing business.

Answer
s. Electronic Commerce has been defined to mean the supply o f goods or
services or both, including digital products over digital or electronic
network.

Q.2. Who is an e-commerce operator?

Answer
Electronic Commerce Operator has been defined to mean any person who owns,
operates or manages digital or electronic facility or platform for electronic
commerce.

Q.3. Is it mandatory for e-commerce operator to obtain
registration?

Answer
Yes. The benefit of threshold exemption is not available to e-commerce
operators and they would be liable to be registered irrespective of the value
of supply made by them.

Q.4. Whether a supplier of goods or services supplying through
e-commerce operator would be entitled to threshold exemption?

Answer
No. The threshold exemption is not available to such suppliers and they would
be liable to be registered irrespective of the value of supply made by them.
This requirement, however, is applicable only if the supply is made through
such electronic commerce operator who is required to collect tax at source.

Q.5. Will an e-commerce operator be liable to pay tax in respect
of supply of goods or services made through it, instead of actual supplier?

Answer
Yes, but only in case of certain notified services. In such cases tax shall be
paid by the electronic commerce operator if such services are supplied through
it and all the provisions of the Act shall apply to such electronic commerce
operator as if he is the person liable to pay tax in relation to supply of such
services.

Q.6. Will threshold exemption be available to electronic commerce
operators liable to pay tax on notified services?

Answer
No. Threshold exemption is not available to ecommerce operator who are require
to pay tax on notified services provided through them.

Q.7. What is Tax Collection at Source (TCS)?

Answer
The e-commerce operator is required to collect an amount calculated at the rate
not exceeding one percent of the net value of taxable supplies made through it,
where the consideration with respect to such supplies is to be collected by
such operator. The amount so collected is called as Tax Collection at Source
(TCS).

Q.8. It is very common that customers of ecommerce companies
return goods. How these returns are going to be adjusted?

Answer
An e-commerce company is required to collect tax only on the net value of
taxable supplies. In other words, value of the supplies which are returned are
adjusted in the aggregate value of taxable supplies.

Q.9. What is meant by ?net value of taxable supplies??

Answer
The "net value of taxable supplies"means the aggregate value of
taxable supplies of goods or services or both, other than the services on which
entire tax is payable by the e-commerce operator, made during any month by all
registered persons through such operator reduced by the aggregate value of
taxable supplies returned to the suppliers during the said month.

Q.10. Is every e-commerce operator required to collect tax on
behalf of actual supplier?

Answer
Yes, every e-commerce operator is required to collect tax where consideration
with respect to the supply is being collected by the e-commerce operator.

Q.11. At what time should the e-commerce operator make such
collection?

Answer
The e-commerce operator should make the collection during the month in which supply
was made.

Q.12. What is the time within which such TCS is to be remitted by
the e-commerce operator to Government account?

Answer
The amount collected by the operator is to be paid to appropriate government
within 10 days after the end of the month in which amount was so collected.

Q.13. How can actual suppliers claim credit of this TCS?

Answer
The amount of TCS deposited by the operator with the appropriate government
will be reflected in the cash ledger of the actual registered supplier (on
whose account such collection has been made) on the basis of the statement
filed by the operator. The same can be used at the time of discharge of tax
liability in respect of the supplies by the actual supplier.

Q.14. Is the e-commerce operator required to submit any statement?
What are the details that are required to be submitted in the statement?

Answer
Yes, every operator is required to furnish a statement, electronically,
containing the details of outward supplies of goods or services effected
through it, including the supplies of goods or services returned through it,
and the amount collected by it as TCS during a month within ten days after the
end of such month. The operator is also required to file an annual statement by
31st day of December following the end of the financial year in which the tax
was collected.

Q.15. Whatis the concept of matching in e-commerce provisions and
how it is going to work?

Answer
The details of supplies and the amount collected during a calendar month, and
furnished by every operator in his statement will be matched with the
corresponding details of outward supplies furnished by the concerned supplier
in his valid return for the same calendar month or any preceding calendar
month. Where the details of outward supply, on which the tax has been
collected, as declared by the operator in his statement do not match with the
corresponding details declared by the supplier the discrepancy shall be
communicated to both persons.

Q.16. What will happen if the details remain mismatched?

Answer
The value of a supply relating to any payment in respect of which any
discrepancy is communicated and which is not rectified by the supplier in his
valid return for the month in which discrepancy is communicated shall be added
to the output liability of the said supplier, for the calendar month succeeding
the calendar month in which the discrepancy is communicated. The concerned
supplier shall, in whose output tax liability any amount has been added shall
be liable to pay the tax payable in respect of such supply along with interest
on the amount so added from the date such tax was due till the date of its
payment.

Q.17. Are there any additional powers to tax officers available?

Answer
Any authority not below the rank of Deputy Commissioner may issue a notice to
the electronic operator to furnish specified details within a period of 15
working days from the date of service of such notice.

Answer
Job work means undertaking any treatment or process by a person on goods
belonging to another registered taxable person. The person who is treating or
processing the goods belonging to other person is called "job
worker"and the person to whom the goods belongs is called "principal".
This definition is much wider than the one given in Notification No. 214/86
"CE dated 23rd March, 1986. In the said notification, job work has been
defined in such a manner so as to ensure that the activity of job work must
amount to manufacture. Thus the definition of job work itself reflects the
change in basic scheme of taxation relating to job work in the proposed GST
regime.

Q.2. Whether goods sent by a taxable person to a job worker will
be treated as supply and liable to GST? Why?

Answer
It will be treated as a supply as supply includes all forms of supply such as
sale, transfer, etc. However, the registered taxable person (the principal),
under intimation and subject to such conditions as may be prescribed send any
inputs and/or capital goods, without payment of tax, to a job worker for job
work and from there subsequently to another job worker(s) and shall either
bring back such inputs/capital goods after completion of job work or otherwise
within 1 year/3years of their being sent out or supply such inputs/capital
goods after completion of job work or otherwise within 1 year / 3 years of
their being sent out, from the place of business of a job worker on payment of
tax within India or with or without payment of tax for export.

Q.3. Is a job worker required to take registration?

Answer
Yes, as job work is a service, the job worker would be required to obtain
registration if his aggregate turnover exceeds the prescribed threshold.

Q.4. Whether the goods of principal directly supplied from the job
worker?s premises will be included in the aggregate turnover of the job worker?

Answer
No. It will be included in the aggregate turnover of the principal. However,
the value of goods or services used by the job worker for carrying out the job
work will be included in the value of services supplied by the job worker.

Q.5. Can a principal send inputs and capital goods directly to the
premises of job worker without bringing it to his premises?

Answer
Yes, the principal is allowed to do so. The input tax credit of tax paid on
inputs or capital goods can also be availed by the principal in such a
scenario. The inputs or capital goods must be received back within one year or
three years respectively failing which the original transaction would be
treated as supply and the principal would be liable to pay tax accordingly.

Q.6. Can the principal supply the goods directly from the premises
of the job worker without bringing it back to his own premises?

Answer
Yes. But the principal should have declared the premises of an unregistered job
worker as his additional place of business. If the job worker is a registered
person then goods can be supplied directly from the premises of the job worker.
The Commissioner may also notify goods in which case goods sent for job work can
be directly supplied from the premises of the job worker.

Q.7. Under what circumstances can the principal directly supply
goods from the premises of job worker without declaring the premises of job
worker as his additional place of business?

Answer
The goods can be supplied directly from the place of business of job worker
without declaring it as additional place of business in two circumstances
namely where the job worker is a registered taxable person or where the
principal is engaged in supply of such goods as may be notified by the
Commissioner.

Q.8. What are the provisions concerning taking of ITC in respect
of inputs/capital goods sent to a job worker?

Answer
Principal shall be entitled to take credit of taxes paid on inputs or capital
goods sent to a job worker whether sent after receiving them at his place of
business or even when such the inputs or capital goods are directly sent to a
job worker without their being first brought to his place of business. However,
the inputs or capital goods, after completion of job work, are required to be
received back or supplied from job worker"s premises, as the case may be,
within a period of one year or three years of their being sent out

Q.9. What happens when the inputs or capital goods are not
received back or supplied from the place of business of job worker within
prescribed time period?

Answer
If the inputs or capital goods are not received back by the principal or are
not supplied from the place of business of job worker within the prescribed
time limit, it would be deemed that such inputs or capital goods had been
supplied by the principal to the job worker on the day when the said inputs or
capital goods were sent out by the principal (or on the date of receipt by the
job worker where the inputs or capital goods were sent directly to the place of
business of job worker). Thus the principal would be liable to pay tax
accordingly.

Q.10. Some capital goods like jigs and fixtures are non-usable
after their user and normally sold as scrap. What is the treatment of such
items in job work provisions?

Answer
The condition of bringing back capital goods within three years is not
applicable to moulds, dies, jigs and fixtures or tools

Q.11. What would be treatment of the waste and scrap generated
during the job work?

Answer
The waste and scrap generated during the job work can be supplied by the job
worker directly from his place of business, on payment of tax, if he is
registered. If he is not registered, the same would be supplied by the
principal on payment of tax.

Q.12. Whether intermediate goods can also be sent for job work?

Answer
Yes. The term inputs, for the purpose of job work, includes intermediate goods
arising from any treatment or process carried out on the inputs by the
principal or job worker.

Q.13. Who is responsible for the maintenance of proper accounts
related to job work?

Answer
It is completely the responsibility of the principal to maintain proper
accounts of job work related inputs and capital goods.

Q.14. Are the provisions of job work applicable to all categories
of goods?

Answer
No. The provisions relating to job work are applicable only when registered
taxable person intendsto send taxable goods. In other words, these provisions
are not applicable to exempted or non-taxable goods or when the sender is a
person other than registered taxable person.

Q.15. Is it compulsory that job work provisions should be followed
by the principal?

Answer
No. The principal can send the inputs or capital goods after payment of GST
without following the special procedure. In such a case, the job-worker would
take the input tax credit and supply back the processed goods (after completion
of job-work) on payment of GST.

Q.16. Should job worker and principal be located in same State or
Union territory?

Answer
No this is not necessary as provisions relating to job work have been adopted
in the IGST Act as well as in UTGST Act and therefore job-worker and principal
can be located either is same State or in same Union Territory or in different
States or Union Territories.

Answer
Input tax means the central tax (CGST), State tax (SGST), integrated tax (IGST)
or Union territory tax (UTGST) charged on supply of goods or services or both
made to a registered person. It also includes tax paid on reverse charge basis
and integrated tax goods and services tax charged on import of goods. It does
not include tax paid under composition levy

Q.2. Can GST paid on reverse charge basis be considered as input
tax?

Answer
Yes. The definition of input tax includes the tax payable under the reverse
charge.

Answer
Yes, it includes taxes paid on input goods, input services and capital goods.
Credit of tax paid on capital goods is permitted to be availed in one
instalment.

Q.4. Is credit of all input tax charged on supply of goods or
services allowed under GST?

Answer
A registered person is entitled to take credit of input tax charged on supply
of goods or services or both to him which are used or intended to be used in
the course or furtherance of business, subject to other conditions and
restrictions.

Q.5. What are the conditions necessary for obtaining ITC?

Answer
Following four conditions are to be satisfied by the registered taxable person
for obtaining ITC: (a) he is in possession of tax invoice or debit note or such
other tax paying documents as may be prescribed, (b) he has received the goods
or services or both, (c) the supplier has actually paid the tax charged in
respect of the supply to the government, and (d) he has furnished the return
under section 39.

Q.6. Where the goods against an invoice are received in lots or
instalments, how will a registered person be entitled to ITC?

Answer
The registered person shall be entitled to the credit only upon receipt of the
last lot or installment.

Q.7. Can a person take input tax credit without payment of
consideration for the supply along with tax to the supplier?

Answer
Yes, the recipient can take ITC. But he is required to pay the consideration
along with tax within 180 days from the date of issue of invoice. This
condition is not applicable where tax is payable on reverse charge basis.

Q.8. What would happen of the ITC taken by the registered person
if he has not paid the consideration along with tax within 180 days from the
date of issue of invoice?

Answer
The amount of ITC would be added to output tax liability of the person. He
would also be required to pay interest. However, he can take ITC again on
payment of consideration and tax.

Q.9. Who will get the ITC where goods have been delivered to a
person other than taxable person (?bill to?- ?ship to ?scenarios)?

Answer
It would be deemed that the registered person has received the goods when the
goods have been delivered to a third party on the direction of such taxable
person. So ITC will be available to the person on whose order the goods are
delivered to third person.

Q.10. What is the time limit for taking ITC and reasons therefor?

Answer
A registered person cannot take ITC in respect of any invoice or debit note for
supply of goods or services after the due date for furnishing the return under
section 39 for the month of September following the end of financial year to
which such invoice/invoice relating to debit note pertains or furnishing of the
relevant annual return, whichever is earlier. So, the upper time limit for
taking ITC is 20th October of the next FY or the date of filing of annual
return whichever is earlier. The underlying reasoning for this restriction is
that no change in return is permitted after September of next FY. If annual
return is filed before the month of September, then no change can be made after
filing of annual return.

Q.11. Where the registered taxable person has claimed depreciation
on the tax component of the cost of capital goods under the provisions of the
Income Tax Act,1961, will ITC be allowed in such cases?

Answer
The input tax credit shall not be allowed on the said tax component in respect
of which depreciation has been claimed.

Q.12. Is credit of tax paid on every input used for supply of
taxable goods or services or both is allowed under GST?

Answer
Yes, except a small list of items provided in the law, the credit is admissible
on all items. The list covers mainly items of personal consumption, inputs use
of which results into formation of an immovable property (except plant and
machinery), telecommunication towers, pipelines laid outside the factory
premises, etc. and taxes paid as a result of detection of evasion of taxes.

Q.13. A taxable person is in the business of information
technology. He buys a motor vehicle for use of his Executive Directors. Can he
avail the ITC in respect of GST paid on purchase of such motor vehicle?

Answer
No. ITC on motor vehicles can be availed only if the taxable person is in the
business of transport of passengers or goods or is providing the services of
imparting training on motor vehicles

Q.14. Sometimes goods are destroyed or lost due to various
reasons? Can a person take ITC to the extent of such goods?

Answer
No, a person cannot take ITC with respect to goods lost, stolen, destroyed or
written off. In addition, ITC with respect of goods given as gifts or free
samples are also not allowed.

Q.15. Can a registered person get ITC with respect of goods or
services used for construction of a building for business purposes?

Answer
No. ITC on goods or services by a person for construction of immovable
property, other than plant and machinery, is not allowed. Plant and machinery
cover only apparatus, equipment, and machinery fixed to earth by foundation or
structural support, and excludes land and building, among other things.

Q.16. What is the ITC entitlement of a newly registered person?

Answer
A person applying for registration can take input tax credit of inputs held in
stock and inputs contained in semifinished or finished goods held in stock on
the day immediately preceding the date of grant of registration. If the person
was liable to take registration and he has applied for registration within
thirty days from the date on which he became liable to registration, then input
tax credit of inputs held in stock and inputs contained in semifinished or
finished goods held in stock on the day immediately preceding the date on which
he became liable to pay tax can be taken.

Q.17. A person becomes liable to pay tax on 1st August, 2017and
has obtained registration on 15th August, 2017. Such person is eligible for
input tax credit on inputs held in stock as on: (a)1st August, 2017 (b) 31st
July, 2017 (c) 15th August, 2017 (d)He cannot take credit for the past period

Answer
31st July, 2017.

Q.18. What is the eligibility of input tax credit on inputs in
stock for a person who obtains voluntary registration?

Answer
The person who obtains voluntary registration is entitled to take the input tax
credit of input tax on inputs in stock, inputs in semi- finished goods and
finished goods in stock, held on the day immediately preceding the date of
registration.

Q.19. What would be input tax eligibility in cases where there is
a change in the constitution of a registered person?

Answer
The registered person shall be allowed to transfer the input tax credit that
remains unutilized in its electronic credit ledger to the new entity, provided
that there is a specific provision for transfer of liabilities.

Q.20. Where goods or services or both received by a taxable person
are used for effecting both taxable and non-taxable supplies, whether the input
tax credit is available to the registered taxable person?

Answer
The input tax credit of goods or services or both attributable only to taxable
supplies can be taken by registered person. The manner of calculation of
eligible credit would be provided by rules.

Q.21. If input tax credit is allowed only in respect of goods or
services or both for effecting taxable supplies, would it not lead to loss of
input tax credit on exempt supplies when exported?

Answer
Zero-rated supplies have been covered within taxable supplies for the purpose
of allowing input tax credit. The scope of zero-rated supply is provided in the
Integrated Goods and Services Tax Act which includes even exempt supplies.

Q.22. Which of the following is included for computation of
taxable supplies for the purpose of availing credit? (a) Zero-rated supplies
(b) Exempt supplies (c) Both

Answer
Zero rated supplies.

Q.23. Where goods or services received by a registered person are
used partly for the purpose of business and partly for other purposes, whether
the input tax credit is available to the person?

Answer
The input tax credit of goods or services or both attributable only to the
purpose of business can be taken by registered person. The manner of
calculation of eligible credit would be provided by rules.

Q.24. A person paying tax under compounding scheme crosses the
compounding threshold and becomes a regular taxable person. Can he avail ITC
and if so from what date?

Answer
He can avail ITC in respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock and on capital goods (reduced by
prescribed percentage points) on the day immediately preceding the date from
which he ceases to be eligible for composition scheme. The manner of
calculation of eligible credit would be provided by rules.

Q.25. Are there any special provisions in respect of banking
companies?

Answer
A banking company or a financial institution including a non-banking financial
company engaged in supply of specified services would either avail
proportionate credit or avail 50% of the eligible input tax credit.

Q.26. Mr. A, a registered person was paying tax under composition
scheme up to 30th July, 2017. However, w.e.f 31st July, 2017, Mr. A becomes
liable to pay tax under regular scheme. Is he eligible for ITC?

Answer
Mr. A is eligible for input tax credit on inputs held in stock and inputs
contained in semi-finished or finished goods held in stock and capital goods
(reduced by such percentage points as may be prescribed) as on 30th July, 2017.

Answer
Mr. B is eligible for input tax credit on inputs held in stock and inputs
contained in semi-finished or finished goods held in stock as on 21st June,
2017. Mr. B cannot take input tax credit in respect of capital goods.

Q.28. What would happen to the input tax credit availed by a
registered person who opts for composition scheme or where the goods or
services or both supplied by him become wholly exempt?

Answer
The registered person has to pay an amount equal to the input tax credit in
respect of stocks held on the day immediately preceding the date of exercise of
option or date of exemption. In respect of capital goods, the payable amount
would be calculated by reducing by a prescribed percentage point. The payment
can be made by debiting electronic credit ledger, if there is sufficient
balance in the credit ledger, or by debiting electronic cash ledger. If any
balance remains in the credit ledger, it would lapse.

Q.29. Is there any restriction on period for availment of ITC?

Answer
In cases of new registration, change from composition to normal scheme, from
exempt to taxable supplies, the concerned person cannot avail ITC after the
expiry of one year from the date of issue of tax invoice relating to such
supply

Q.30. What happens where the details of inward supplies furnished
by the recipient do not match with the outward supply details furnished by the
supplier in his valid return?

Answer
In case of mismatch, the communication would be made to the both parties. If
the mismatch is not rectified, then the amount will be added to the output
liability of recipient in the return for the month succeeding the month in
which discrepancy is communicated.

Q.31. Is input tax credit allowed only after matching?

Answer
No, input tax credit is allowed provisionally for two months. The supply
details are matched by the system and discrepancies are communicated to
concerned supplier and recipient. In case mismatch continues, the ITC taken
would be reversed automatically.

Q.32. Can provisionally allowed ITC be used for payment of all
liabilities?

Answer
No, provisionally allowed ITC can be used only for the payment of self-assessed
output tax in the return.

Q.33. What will be the tax impact when capital goods on which ITC
has been taken are supplied by taxable person?

Answer
In case of supply of capital goods or plant and machinery on which input tax
credit has been taken, the registered person shall pay an amount equal to the
input tax credit taken on the said capital goods or plant an d machin ery
reduced by the percentage points as may be specified in this behalf or the tax
on the transaction value of such capital goods, whichever is higher.

Q.34. What is the tax implication of supply of capital goods by a
registered person who had taken ITC on such capital goods?

Answer
The registered person would pay an amount equal to ITC reduced by prescribed
percentage point or tax on the transaction value, whichever is higher. But in
case of refractory bricks, moulds and dies, jigs and fixtures when these are
supplied as scrap, the person can pay tax on the transaction value

Answer
ISD means an office of the supplier of goods or services or both which receives
tax invoices towards receipt of input services and issues a prescribed document
for the purposes of distributing the credit of central tax (CGST), State tax
(SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said
services to a supplier of taxable goods or services or both having same PAN as
that of the ISD.

Q.2. What are the requirements for registration as ISD?

Answer
An ISD is required to obtain a separate registration even though it may be
separately registered. The threshold limit of registration is not applicable to
ISD. The registration of ISD under the existing regime (i.e. under Service Tax)
would not be migrated in GST regime. All the existing ISDs will be required to
obtain fresh registration under new regime in case they want to operate as an
ISD.

Q.3. What are the documents for distribution of credit by ISD?

Answer
The distribution of credit would be done through a document especially designed
for this purpose. The said document would contain the amount of input tax
credit being distributed.

Q.4. Can an ISD distribute the input tax credit to all suppliers?

Answer
No. The input tax credit of input services shall be distributed only amongst
those registered persons who have used the input services in the course or
furtherance of business.

Q.5. It is not possible many a times to establish a one-to-one
link between quantum of input services used in the course or furtherance of
business by a supplier. In such situations, how distribution of ITC by the ISD
is to be done?

Answer
In such situations, distribution would be based on a formula. Firstly,
distribution would be done only amongst those recipients of input tax credit to
whom the input service being distributed are attributable. Secondly,
distribution would be done amongst the operational units only. Thirdly,
distribution would be done in the ratio of turnover in a State or Union
territory of the recipient during the period to the aggregate of all recipients
to whom input service being distributed is attributable. Lastly, the credit
distributed should not exceed the credit available for distribution.

Q.6. What does the turnover used for ISD cover?

Answer
The turnover for the purpose of ISD does not include any duty or tax levied
under entry 84 of List I and entry 51 and 54 of List II of the Seventh Schedule
to the Constitution.

Q.7. Is the ISD required to file return?

Answer
Yes, ISD is required to file monthly return by 13th of the following month

Q.9. What are the provisions for recovery of excess/wrongly
distributed credit by ISD?

Answer
The excess/wrongly distributed credit can be recovered from the recipients of
credit along with interest by initiating action under section 73 or 74

Q.10. Whether CGST and IGST credit can be distributed by ISD as
IGST credit to recipients located in different States?

Answer
Yes, CGST credit can be distributed as IGST and IGST credit can be distributed
as CGST by an ISD for the recipients located in different States.

Q.11. Whether SGST / UTGST credit can be distributed as IGST
credit by an ISD to recipients located in different States?

Answer
Yes, an ISD can distribute SGST /UTGST credit as IGST for the recipients
located in different States.

Q.12. Whether the ISD can distribute the CGST and IGST Credit as
CGST credit?

Answer
Yes, CGST and IGST credit can be distributed as CGST credit by an ISD for the
recipients located in same State.

Q.13. Whether the SGST/ UTGST a nd IGST C red it can be
distributed as SGST/UTGST credit?

Answer
Yes, ISD can distribute SGST and IGST credit as SGST / UTGST credit for the
recipients located in same State.

Q.14. How to distribute common credit among all the recipients of
an ISD?

Answer
The common credit used by all the recipients can be distributed by ISD on pro
rata basis i.e. based on the turnover of each recipient to the aggregate
turnover of all the recipients to which credit is distributed

Q.15. The ISD may distribute the CGST and IGST credit to recipient
outside the State as_______ (a) IGST (b) CGST (c) SGST

Answer
(a) IGST.

Q.16. The ISD may distribute the CGST credit within the State
as____ (a) IGST (b) CGST (c) SGST (d) Any of the above.

Answer
(b) CGST

Q.17. The credit of tax paid on input service used by more than one
supplier is ________ (a) Distributed among the suppliers who used such input
service on pro rata basis of turnover in such State. (b) Distributed equally
among all the suppliers. (c) Distributed only to one supplier. (d) Cannot be
distributed

Answer
(a) Distributed among the suppliers who used such input service on pro rata
basis of turnover in such State.

Q.18. Whether the excess credit distributed could be recovered
from ISD by the department?

Answer
No. Excess credit distributed can be recovered along with interest only from
the recipient and not ISD. The provisions of section 73 or 74 would be
applicable for the recovery of credit.

Q.19. Whataretheconsequencesofcreditdistributed in contravention
of the provisions of the Act?

Answer
The credit distributed in contravention of provisions of Act could be recovered
from the recipient to which it is distributed along with interest.

Answer
a) Mode for transfer of information to tax administration, b) Compliance
verification program of tax administration, c) Finalization of the tax
liabilities of the taxpayer within stipulated period of limitation, to declare
tax liability for a given period, d) Providing necessary inputs for taking
policy decision, e) Management of audit and anti-evasion programs of tax
administration.

Q.2. Who needs to file Return in GST regime?

Answer
Every person registered under GST will have to file returns in some form or
other. A registered person will have to file returns either monthly (normal
supplier) or quarterly basis (Supplier opting for composition scheme). An ISD
will have to file monthly returns showing details of credit distributed during
the particular month. A person required to deduct tax (TDS) and persons
required to collect tax (TCS) will also have to file monthly returns showing
the amount deducted/collected and other details as may be prescribed. A
non-resident taxable person will also have to file returns for the period of
activity undertaken.

Q.3. What type of outward supply details are to be filed in the
return?

Answer
A normal registered taxpayer has to file the outward supply details in GSTR-1
in relation to various types of supplies made in a month, namely outward
supplies to registered persons, outward supplies to unregistered persons
(consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST
supplies, exports, and advances received in relation to future supply.

Q.4. Is the scanned copy of invoices to be uploaded along with
GSTR-1?

Answer
No scanned copy of invoices is to be uploaded. Only certain prescribed fields
of information from invoices need to be uploaded.

Q.5. Whether all invoices will have to be uploaded?

Answer
No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state
supplies. For B2B supplies, all invoices, whether Intra-state or Interstate
supplies, will have to be uploaded. Why So"Because ITC will be taken by
the recipients, invoice matching is required to be done. In B2C supplies,
uploading in general may not be required as the buyer will not be taking ITC.
However still in order to implement the destination based principle, invoices
of value more than Rs.2.5 lacs in inter-state B2C supplies will have to be
uploaded. For inter-state invoices below Rs. 2.5 lacs and all intra-state
invoices, state wise summary will be sufficient.

Q.6. Whether description of each item in the invoice will have to
be uploaded?

Answer
No. In fact, description will not have to be uploaded. Only HSN code in respect
of supply of goods and Accounting code in respect of supply of services will
have to be fed. The minimum number of digitsthat the filer will have to upload
would depend on his turnover in the last year.

Q.7. Whether value for each transaction will have to be fed? What
if no consideration?

Answer
Yes. Not only value but taxable value will also have to be fed. In some cases,
both may be different. In case there is no consideration, but it is supply by
virtue of schedule 1, the taxable value will have to be worked out as
prescribed and uploaded.

Q.8. Can a recipient feed information in his GSTR-2 which has been
missed by the supplier?

Answer
Yes, the recipient can himself feed the invoices not uploaded by his supplier.
The credit on such invoices will also be given provisionally but will be
subject to matching. On matching, if the invoice is not uploaded by the
supplier, both of them will be intimated. If the mismatch is rectified,
provisional credit will be confirmed. But if the mismatch continues, the amount
will be added to the output tax liability of the recipient in the returns for
the month subsequent to the month in which such discrepancy was communicated.

Q.9. Does the taxable person have to feed anything in the GSTR-2
or everything is autopopulated from GSTR-1?

Answer
While a large part of GSTR-2 will be auto-populated, there are some details
that only recipient can fill like details of imports, details of purchases from
non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc

Q.10. What if the invoices do not match? Whether ITC is to be
given or denied? If denied, what action is taken against supplier?

Answer
If invoices in GSTR-2 do not match with invoices in counter-party GSTR-1, then
such mismatch shall be intimated to the supplier. If the mismatch continues
even after it is made known to both and still it is not rectified. Mismatch can
be because of two reasons. First, it could be due to mistake at the side of the
recipient, and in such a case, no further action is required. Secondly, it
could be possible that the said invoice was issued by supplier but he did not
upload it and pay tax on it. In such a case, the ITC availed by the recipient
would be added to his output tax liability, in short, all mismatches will lead
to proceedings if the supplier has made a supply but not paid tax on it.

Q.11. What will be the legal position in regard to the reversed
input tax credit if the supplier later realizes the mistake and feeds the
information?

Answer
At any stage, but before September of the next financial year, supplier can
upload the invoice and pay duty and interest on such missing invoices in his
GSTR-3 of the month in which he had earlier failed to upload the invoice. The
recipient shall be eligible to reduce his output tax liability to the extent of
the amount in respect of which the supplier has rectified the mis-match. The
interest paid by the recipient at the time of reversal will also be refunded to
the recipient by crediting the amount in corresponding head of his electronic
cash ledger.

Q.12. What is the special feature of GSTR-2?

Answer
The special feature of GSTR-2 is that the details of supplies received by a
recipient can be auto populated on the basis of the details furnished by the
counterparty supplier in his GSTR-1.

Q.13. Do tax payers under the composition scheme also need to file
GSTR-1 and GSTR-2?

Answer
No. Composition tax payers do not need to file any statement of outward or
inward supplies. They have to file a quarterly return in Form GSTR-4 by the
18th of the month after the end of the quarter. Since they are not eligible for
any input tax credit, there is no relevance of GSTR-2 for them and since the
credit of tax paid under Composition Levy is not eligible, there is no
relevance of GSTR-1 for them. In their return, they have to declare summary
details of their outward supplies along with the details of tax payment. They
also have to give details of their purchases in their quarterly return itself,
most of which will be auto populated.

Q.14. Do Input Service Distributors (ISDs) need to file separate
statement of outward and inward supplies with their return?

Answer
No, the ISDs need to file only a return in Form GSTR- 6 and the return has the
details of credit received by them from the service provider and the credit
distributed by them to the recipient units. Since their return itself covers
these aspects, there is no requirement to file separate statement of inward and
outward supplies.

Q.15. How does a taxpayer get the credit of the tax deducted at
source on his behalf? Does he need to produce TDS certificate from the deductee
to get the credit?

Answer
Under GST, the deductor will be submitting the deductee wise details of all the
deductions made by him in his return in Form GSTR-7 to be filed by 10th of the
month next to the month in which deductions were made. The details of the
deductions as uploaded by the deductor shall be auto populated in the GSTR-2 of
the deductee. The taxpayer shall be required to confirm these details in his
GSTR-2 to avail the credit for deductions made on his behalf. To avail this
credit, he does not require to produce any certificate in physical or
electronic form. The certificate will only be for record keeping of the tax
payer and can be downloaded from the Common Portal.

Q.16. Which type of taxpayers need to file Annual Return?

Answer
All taxpayers filing return in GSTR-1 to GSTR-3, other than ISD"s,
casual/non-resident taxpayers, taxpayers under composition scheme, TDS/TCS
deductors, are requiredto file an annual return. Casualtaxpayers, nonresident
taxpayers, ISDs and persons authorized to deduct/collect tax at source are not
required to file annual return.

Q.17. Is an Annual Return and a Final Return one and the same?

Answer
No. Annual Return has to be filed by every registered person paying tax as a
normal taxpayer. Final Return has to be filed only by those registered persons
who have applied for cancellation of registration. The Final return has to be
filed within three months of the date of cancellation or the date of
cancellation order.

Q.18. If a return has been filed, how can it be revised if some
changes are required to be made?

Answer
In GST since the returns are built from details of individual transactions, there
is no requirement for having a revised return. Any need to revise a return may
arise due to the need to change a set of invoices or debit/ credit notes.
Instead of revising the return already submitted, the system will allow
changing the details ofthose transactions (invoices or debit/credit notes) that
are required to be amended. They can be amended in any of the future GSTR- 1/2
in the tables specifically provided for the purposes of amending previously
declared details.

Q.19. How can taxpayers file their returns?

Answer
Taxpayers will have various modes to file the statements andreturns.
Firstly,they can file their statement and returns directly onthe Common Portal
online. However, this may be tedious and time consuming for taxpayers with
large number of invoices. For such taxpayers, an offline utility will be
provided that can be used for preparing the statements offline after
downloading the auto populated details and uploading them on the Common Portal.
GSTN has also developed an ecosystem of GST Suvidha Providers (GSP) that will
integrate with the Common Portal.

Q.20. What precautions, a taxpayer is required to take for a
hassle free compliance under GST?

Answer
One of the most important things under GST will be timely uploading of the
details of outward supplies in Form GSTR-1 by 10th of next month. How best this
can be ensured will depend on the number of B2B invoices that the taxpayer
issues. If the number is small, the taxpayer can upload all the information in
one go. However, if the number of invoices is large, the invoices(or debit/
credit notes)should be uploaded on a regular basis. GSTN will allow regular
uploading of invoices even on a real time basis. Till the statement is actually
submitted, the system will also allow the taxpayer to modify the uploaded
invoices. Therefore, it would always be beneficial for the taxpayers to
regularly upload the invoices. Last minute rush will make uploading difficult
and will come with higher risk of possible failure and default. The second
thing would be to ensure that taxpayers follow up on uploading the invoices of
their inward supplies by their suppliers. This would be helpful in ensuring
that the input tax credit is available without any hassle and delay. Recipients
can also encourage their suppliersto upload their invoices on a regular basis
instead of doing it on or close to the due date. The systemwould
allowrecipientsto see iftheir suppliers have uploaded invoices pertaining to
them. The GSTN system will also provide the track record about the compliance
level of a tax payer, especially about histrack record in respect of timely
uploading of his supply invoices giving details about the auto reversals that
have happened for invoices issued by a supplier. The Common Portal of GST would
have pan India data at one place which will enable valuable services to the
taxpayers. Efforts are being made to make regular uploading of invoices as easy
as possible and it is expected that an enabling ecosystem will be developed to
achieve this objective. Taxpayers should make efficient use of this ecosystem
for easy and hassle free compliance under GST.

Q.21. Is it compulsory for a taxpayer to file return by himself?

Answer
No. A registered taxpayer can also get his return filed through a Tax Return
Preparer, duly approved by the Central or the State tax administration.

Q.22. What is the consequence of not filing the return within the
prescribed date?

Answer
A registered person who files return beyond the prescribed date will have to
pay late fees of rupees one hundred for every day of delay subject to a maximum
of rupees five thousand. For failure to furnish Annual returns by due date,
late fee of Rs. One hundred for every day during which such failure continues
subject to a maximum of an amount calculated at a quarter percent [0.25%] of
his turnover in a state, will be levied.

Q.23. What happens if ITC is taken on the basis of a document more
than once?

Answer
In case the system detects ITC being taken on the same document more than once
(duplication of claim), the amount of such credit would be added to the output
tax liability of the recipient in the return. [section 42(6)]

Q.24. Whether the amount of credit detected by the system on
account of mis-match between GSTR-1 and GSTR-2 and recovered as output tax can
be reclaimed?

Answer
Yes, once the mismatch is rectified by the supplier by declaring the details of
the invoices or debit notes, as the case may be, in his valid return for the
month/quarter in which the error had been detected. The said amount can be
reclaimed by way of reducing the output tax liability during the subsequent tax
period. [section 42(7)]. Similar provisions have also been made in Section 43
of the Act in respect of the credit notes issued by the supplier.

Q.1. Who is the person responsible to make assessment of taxes
payable under the Act?

Answer
Every person registered under the Act shall himself assess the tax payable by
him for a tax period and after such assessment he shall file the return
required under section 39.

Q.2. When can a taxable person pay tax on a provisional basis?

Answer
As a taxpayer has to pay tax on self-assessment basis, a request for paying tax
on provisional basis has to come from the taxpayer which will then have to be
permitted by the proper officer. In other words, no tax officer can suo-moto
order payment of tax on provisional basis. This is governed by section 60 of
CGST/SGST Act. Tax can be paid on a provisional basis only after the proper
officer has permitted it through an order passed by him. For this purpose, the
taxable person has to make a written request to the proper officer, giving
reasons for payment of tax on a provisional basis. Such a request can be made
by the taxable person only in such cases where he is unable to determine: a)
the value of goods or services to be supplied by him, or b) determine the tax
rate applicable to the goods or services to be supplied by him. In such cases
the taxable person has to execute a bond in the prescribed form, and with such
surety or security as the proper officer may deem fit.

Q.3. What is the latest time by which final assessmentis required
to be made?

Answer
The final assessment order has to be passed by the proper officer within six
months from the date of the communication of the order of provisional
assessment. However, on sufficient cause being shown and for reasons to be
recorded in writing, the above period of six months may be extended: a) by t h
e J o i n t / Additional C o m m i s s i o n e r fo r a further period not
exceeding six months, and b) by the Commissioner for such further period as he
may deem fit not exceeding fours. Thus, a provisional assessment can remain
provisional for a maximum of five years.

Q.4. Where the tax liability as per the final assessment is higher
than in provisional assessment, will the taxable person be liable to pay
interest?

Answer
Yes. He will be liable to pay interest from the date the tax was due to be paid
originally till the date of actual payment.

Q.5. What recourse may be taken by the officer in case proper
explanation is not furnished for the discrepancy detected in the return filed,
while conducting scrutiny under section 61 of CGST ACT?

Answer
If the taxable person does not provide a satisfactory explanation within 30
days of being informed (extendable by the officer concerned) or after accepting
discrepancies, fails to take corrective action in the return for the month in
which the discrepancy is accepted, the Proper Officer may take recourse to any
of the following provisions: (a) Proceed to conduct audit under Section 6 5 of
the Act, (b) DirecttheconductofaspecialauditunderSection 66 which is to be
conducted by a Chartered Accountant or a Cost Accountant nominated for this
purpose by the Commissioner, or (c) Undertake procedures of inspection, search
and seizure under Section 67 of the Act, or (d) Initiate pr oceedin g for det
er min at ion of t ax an d ot her du es under Section 73 or 74 of the Act.

Q.6. If a taxable person fails to file the return required under
law (under section 39 ( monthly/ quarterly) , or 45 ( final return) , what
legal recourse is available to the tax officer?

Answer
The proper officer has to first issue a notice to the defaulting taxable person
under section 46 of CGST/SGST Act requiring him to furnish the return within a
period of fifteen days. If the taxable person fails to file return within the
given time, the proper officer shall proceed to assess the tax liability of the
return defaulter to the best of his judgement taking into account all the
relevant material available with him. (Section 62).

Q.7. Under what circumstances can a best judgment assessment order
issued under section 60 be withdrawn?

Answer
The best judgment order passed by the Proper Officer under section 62 of
CGST/SGST Act shall automatically stand withdrawn if the taxable person
furnishes a valid return for the default period (i.e. files the return and pays
the tax as assessed by him), within thirty days of the receipt of the best
judgment assessment order

Q.8. What is the time limit for passing assessment order u/s 62
(Best Judgment) and 63 (Non-filers)?

Answer
The time limit for passing an assessment order under section 62 or 63 is five
years from the due date for furnishing the annual return.

Q.9. What is the legal recourse available in respect of a person
who is liable to pay tax but has failed to obtain registration?

Answer
Section 63 of CGST/SGST Act provides that in such a case, the proper officer
can assess the tax liability and pass an order to his best judgment for the
relevant tax periods. However, such an order must be passed within a period of
five years from the due date for furnishing the annual return for the financial
year to which non-payment of tax relates.

Q.10. Under what circumstances can a tax officer initiate Summary
Assessment?

Answer
As per section 64 of CGST/SGST Act, Summary Assessments can be initiated to
protect the interest of revenue when: a) the proper officer has evidence that a
taxable person has incurred a liability to pay tax under the Act, and b) the
proper officer believes that delay in passing an assessment order will
adversely affect the interest of revenue. Such order can be passed after
seeking permission from the Additional Commissioner / Joint Commissioner

Q.11. Other than appellate remedy, is there any other recourse
available to the taxpayer against a summary assessment order?

Answer
A taxable person against whom a summary assessment order has been passed can
apply for its withdrawal to the jurisdictional Additional/Joint Commissioner
within thirty days of the date of receipt of the order. If the said officer
finds the order erroneous, he can withdraw it and direct the proper officer to
carry out determination of tax liability in terms of section 73 or 74 of CGST/SGST
Act. The Additional/Joint Commissioner can follow a similar course of action on
his own motion if he finds the summary assessment order to be erroneous
(section 64 of CGST/SGST Act).

Q.12. Is summary assessment order to be necessarily passed against
the taxable person?

Answer
No. In certain cases, like when goods are under transportation or are stored in
a warehouse, and the taxable p e r s o n in r e s p e c t o f s u c h g o o d s
c a n n o t b e ascertained, the person in charge of such goods shall be deemed
to be the taxable person and will be assessed to tax (proviso to Section 64 of
CGST/SGST Act).

Q.13. Who can conduct audit of taxpayers?

Answer
There are three types of audit prescribed in the GST Act(s) as explained below:
(a) Audit by Chartered Accountant or a Cost Accountant: Every registered person
whose turnover exceeds the prescribed limit, shall get his accounts audited by
a chartered accountant or a cost accountant. (Section 35(5) of the CGST/SGST
Act) (b) Audit by Department: The Commissioner or any officer of CGST or SGST
or UTGST authorized by him by a general or specific order, may conduct audit of
any registered person. The frequency and manner of audit will be prescribed in
due course. (Section 65 of the CGST/SGST Act) (c) Special Audit: If at any
stage of scrutiny, inquiry, investigations or any other proceedings, if
department is of the opinion that the value has not been correctly declared or
credit availed is not with in the normal limits, department may order special
audit by chartered accountant or cost accountant, nominated by department.
(Section 66 of the CGST/SGST Act)

Q.14. Whether any prior intimation is required before conducting
the audit?

Answer
Yes, prior intimation is required and the taxable person should be informed at
least 15 working days prior to conduct of audit.

Q.15. What is the period within which the audit is to be
completed?

Answer
The audit is required t o be complet ed wit hin 3 months from the date of
commencement of audit. The period is extendable for a further period of a
maximum of 6 months by the Commissioner

Q.16. What is meant by commencement of audit?

Answer
The term "commencement of audit"is important because audit has to be
completed within a given time frame in reference to this date of commencement.
Commencement of audit means the later of the following: a) the date on which
the records/accounts called for by the audit authorities are made available to
them, or b) the actual institution of audit at the place of business of the
taxpayer.

Q.17. What are the obligations of the taxable person when he
receives the notice of audit?

Answer
The taxable person is required to: a) facilitate the verification of
accounts/records available or requisitioned by the authorities, b) provide such
information asthe authorities may require for the conduct of the audit, and c)
render assistance for timely completion of the audit.

Q.18. What would be the action by the proper officer upon
conclusion of the audit?

Answer
The proper officer shall, on conclusion of audit, within 30 days inform the
taxable person about his findings, reasons for findings and the taxable
person"s rights and obligations in respect of such findings.

Q.19. Under what circumstances can a special audit be instituted?

Answer
A special audit can be instituted in limited circumstances where during
scrutiny, investigation, etc. it comes to the notice that a case is complex or
the revenue stake is high. This power is given in section 66 of CGST /SGST Act.

Q.20. "Who can serve the notice of communication

Answer

Q.21. Who will do the special audit?

Answer
A Chartered Accountant or a Cost Accountant so nominated by the Commissioner
may undertake the audit.

Q.22. What is the time limit to submit the audit report?

Answer
The auditor will have to submit the report within 90 days or within the further
extended period of 90 days

Q.23. Who will bear the cost of special audit?

Answer
The expensesfor examination and audit including the remuneration payable to the
auditor will be determined and borne by the Commissioner.

Q.24. What action the tax authorities may take after the special
audit?

Answer
Based on the findings / observations of the special audit, action can be
initiated under Section 73 or Section 74 of the CGST/SGST Act.

Answer
Refund has been discussed in section 54 of the CGST/SGST Act.
"Refund"includes (a) any balance amount in the electronic cash ledger
so claimed in the returns, (b) any unutilized input tax credit in respect of
(i) zero rated supplies made without payment of tax or, (ii) where the credit
has accumulated on account of rate of tax on inputs being higher than the rate
of tax on output supplies (other than nil rated or fully exempt supplies), (c)
tax paid by specialized agency of United Nations or any Multilateral Financial
Institution and Organization notified under the United Nations (Privileges and
Immunities) Act, 1947, Consulate or Embassy of foreign countries on any inward
supply

Q.2. Can unutilized Input tax credit be allowed as refund?

Answer
Unutilized input tax credit can be allowed as refund in accordance with the
provisions of sub-section (3) of section 54 in the following situations: - (i)
Zero rated supplies made without payment of tax, (ii) Where credit has
accumulated on account of rate of tax on inputs being higher than the rate of
taxes on output supplies (other than nil rated or fully exempt supplies)
However, no refund of unutilized input tax credit shall be allowed in cases
where the goods exported out of India are subjected to export duty, and also in
the case where the supplier of goods or services or both avails of drawback in
respect of central tax or claims refund of the integrated tax paid on such
supplies.

Q.3. Can unutilized ITC be given refund, in case goods Exported
outside India are subjected to export duty?

Answer
Refund of unutilized input tax credit is not allowed in cases where the goods
exported out of India are subjected to export duty - as per the second proviso
to Section 54(3) of CGST/SGST Act.

Q.4. Will unutilized ITC at the end of the financial year (after
introduction of GST) be refunded?

Answer
There is no such provision to allow refund of such unutilized ITC at the end of
the financial year in the GST Law. It shall be carried forward to the next
financial year.

Q.5. Suppose a taxable person has paid IGST/ CGST/SGST mistakenly
as an Interstate/intrastate supply, but the nature of which is subsequently
clarified. Can the CGST/SGST be adjusted against wrongly paid IGST or vice
versa?

Answer
The taxable person cannot adjust CGST/SGST or IGST with the wrongly paid IGST
or CGST/SGST but he is entitled to refund of the tax so paid wrongly - Sec.77
of the CGST/SGST Act

Q.6. Whether purchases made by Embassies or UN are taxed or
exempted?

Answer
Supplies to the Embassies or UN bodies will be taxed, which later on can be
claimed as refund by them in terms of Section 54(2) of the CGST/SGST Act. The
claim has to be filed in the manner prescribed under CGST/SGST Refund rules, before
expiry of six months from the last day of the month in which such supply was
received. [The United Nations Organization and Consulates or Embassies are
required to take a Unique Identity Number [section 26(1) of the CGST/SGST Act]
and purchases made by them will be reflected against their Unique Identity
Number in the return of outward supplies of the supplier(s)]

Q.7. What is the time limit for taking refund?

Answer
A person claiming refund is required to file an application before the expiry
of two years from the "relevant date"as given in the Explanation to
section 54 of the CGST/SGST Act.

Q.8. Whether principle of unjust enrichment will be applicable in
refund?

Answer
The principle of unjust enrichment would be applicable in all cases of refund
except in the following cases: - i. Refund of tax paid on zero-rated supplies
of goods or services or both or on inputs or input services used in making such
zero-rated supplies ii. Unutilized input tax credit in respect of (i) zero
rated supplies made without payment of tax or, (ii) where the credit has
accumulated on account of rate of tax on inputs being higher than the rate of
tax on output supplies iii. refund of tax paid on a supply which is not
provided, either wholly or partially, and for which invoice has not been
issued, iv. refund of tax in pursuance of Section 77 of CGST/SGST Act i.e. tax
wrongfully collected and paid to Central Government or State Government v. if
the incidence of tax or interest paid has not been passed on to any other
person, vi. such other class of persons who has borne the incidence of tax as
the Government may notify

Q.9. In case the tax has been passed on to the consumer, whether
refund will be sanctioned?

Answer
Yes, the amount so refunded shall be credited to the Consumer Welfare Fund -
Section 57 of the CGST/SGST Act

Q.10. Is there any time limit for sanctioning of refund?

Answer
Yes, refund has to be sanctioned within 60 days from the date of receipt of
application complete in all respects. If refund is not sanctioned within the
said period of 60 days, interest at the rate notified will have to be paid in
accordance with section 56 of the CGST/SGST Act. However, in case where
provisional refund to the extent of 90% of the amount claimed is refundable in
respect of zero-rated supplies made by certain categories of registered persons
in terms of sub-section (6) of section 54 of the CGST/SGST Act, the provisional
refund has to be given within 7 days from the date of acknowledgement of the
claim of refund.

Q.11. Can refund be withheld by the department?

Answer
Yes, refund can be withheld in the following circumstances: i. If the person
has failed to furnish any return till he files such return, ii. If the
registered taxable person is required to pay any tax, interest or penalty which
has not been stayed by the appellate authority/Tribunal/ court, till he pays
such tax interest or penalty, The proper officer can also deduct unpaid taxes,
interest, penalty, late fee, if any, from the refundable amount "Section
54(10) (d) of the CGST/SGST Act iii. The Commissioner can withhold any refund,
if, the order of refund is under appeal and he is of the opinion that grant of
such refund will adversely affect revenue in the said appeal on account of
malfeasance or fraud committed - Sec.54 (11) of the CGST/SGST Act.

Q.12. Where the refund is withheld under Section 54(11) of the
CGST/SGST Act, will the taxable person be given interest?

Answer
If as a result of appeal or further proceeding the taxable person becomes
entitled to refund, then he shall also be entitled to interest at the rate
notified [section 54(12) of the CGST/SGST Act].

Q.13. Is there any minimum threshold for refund?

Answer
No refund shall be granted if the amount is less than Rs.1000/-. [Sec.54 (14)
of the CGST/SGST Act]

Q.14. How will the refunds arising out of existing law be paid?

Answer
The refund arising out of existing law will be paid as per the provisions of
the existing law and will be made in cash and will not be available as ITC

Q.15. Whether refund can be made before verification of documents?

Answer
In case of any claim of refund to a registered person on account of zero rated
supplies of goods or services or both (other than registered persons as may be
notified), 90% refund may be granted on provisional basis before verification
subject to such conditions and restrictions as may be prescribed in accordance
with sub-section 6 of section 54 of the CGST/SGST Act.

Q.16. In case of refund under exports, whether BRC is necessary
for granting refund?

Answer
In case of refund on account of export of goods, the refund rules do not
prescribe BRC as a necessary document for filing of refund claim. However, for
export of services details of BRC is required to be submitted along with the
application for refund.

Q.17. Will the principle of unjust enrichment apply to exports and
supplies to SEZ Units?

Answer
The principle of unjust enrichment would not be applicable to zero-rated
supplies [i.e. exports and supplies to SEZ units]

Q.18. How will the applicant prove that the principle of unjust
enrichment does not apply in his case?

Answer
Where the claim of refund is less than Rs.2 Lakh, a selfdeclaration by the
applicant based on the documentary or other evidences available with him,
certifying that the incidence of tax has not been passed on to any other person
would make him eligible to get refund. However, if the claim of refund is more
than Rs.2 Lakh, the applicant is required to submit a certificate from a
Chartered Accountant or a Cost Accountant to the effect that the incidence of tax
has not been passed on to any other person.

Q.19. Today under VAT/CST merchant exporters can purchase goods
without payment of tax on furnishing of a declaration form. Will this system be
there in GST?

Answer
There is no such provision in the GST law. They will have to procure goods upon
payment of tax and claim refund of the unutilized input tax credit in
accordance with section 54(3) of the CGST/SGST Act.

Q.20. Presently under Central law, exporters are allowed to obtain
duty paid inputs, avail ITC on it and export goods upon payment of duty (after
utilizing the ITC) and thereafter claim refund of the duty paid on exports.
Will this system continue in GST?

Answer
Yes. In terms of Section 16 of the IGST Act, a registered taxable person shall
have the option either to export goods/services without payment of IGST under
bond or letter of undertaking and claim refund of ITC or he can export
goods/services on payment of IGST and claim refund of IGST paid.

Q.21. What is the time period within which an acknowledgement of a
refund claim has to be given?

Answer
Where an application relates to a claim for refund from the electronic cash
ledger as per sub-section (6) of section 49 of the CGST/SGST Act made through
the return furnished for the relevant tax period the acknowledgement will be
communicated as soon as the return is furnished and in all other cases of claim
of refund the acknowledgement will be communicated to the applicant within 15
days from the date of receipt of application complete in all respect.

Q.22. What is the time period within which provisional refund has
to be given?

Answer
Provisional refund to the extent of 90% of the amount claimed on account of
zero-rated supplies in terms of sub-section (6) of section 54 of the CGST/SGST
Act has to be given within 7 days from the date of acknowledgement of complete
application for refund claim

Q.23. Is there any specified format for filing refund claim?

Answer
Every claim of refund has to be filed in Form GST RFD 1. However, claim of
refund of balance in electronic cash ledger can be claimed through furnishing
of monthly/quarterly returns in Form GSTR 3, GSTR 4 or GSTR 7, as the case may
be, of the relevant period.

Q.24. Is there any specified format for sanction of refund claim?

Answer
The claim of refund will be sanctioned by the proper officer in Form GST RFD-06
if the claim is found to be in order and payment advice will be issued in Form
GST RFD- 05. The refund amount will then be electronically credited to the
applicants given bank account.

Q.25. What happens if there are deficiencies in the refund claim?

Answer
Deficiencies, if any, in the refund claim has to be pointed out within 15 days.
A form GST RFD-03 will be issued by the proper officer to the applicant
pointing out the deficiencies through the common portal electronically
requiring him to file a refund application after rectification of such
deficiencies.

Q.26. Can the refund claim be rejected without assigning any
reasons?

Answer
No. When the proper officer is satisfied that the claim is not admissible he
shall issue a notice in Form GST RFD-08 to the applicant requiring him to
furnish a reply in GST RFD -09 within fifteen days and after consideration of
the applicant"s reply, he can accept or reject the refund claim and pass
an order in Form GST RFD-06 only

Q.1. Which are the applicable sections for the purpose of recovery
of tax short paid or not paid or amount erroneously refunded or input tax
credit wrongly availed or utilized?

Answer
Section 73 deals with the cases where there is no invocation of
fraud/suppression/mis-statement etc. Section 74 deals with cases where the
provisions related to fraud/suppression/mis-statement etc. are invoked.

Q.2. What if person chargeable with tax, pays the amount along
with interest before issue of show cause notice under section 73?

Answer
In such cases notice shall not be issued by the proper officer. {sec.73 (6)}

Q.3. If show cause notice is issued under Section 73 and thereafter
the noticee makes payment along with applicable interest, is there any need to
adjudicate the case?

Answer
If the person pays the tax along with interest within 30 days of issue of
notice, no penalty shall be payable and all proceedings in respect of such
notice shall be deemed to be concluded. {sec.73 (8)}

Q.4. What is the relevant date for issue of Show Cause Notice?

Answer
(i) In case of section 73(cases other than fraud/ suppression of facts/willful
misstatement), the relevant date shall be counted from the due date for filing
of annual return for the financial year to which demand relates to. The SCN has
to be adjudicated within at period of three years from the due date of filing
of annual return. The SCN is required to be issued at least three months prior
to the time limit set for adjudication. {sec.73(2&10)} (ii) In case of
section 74(cases involving fraud/ suppression of facts/willful misstatement),
the relevant date shall be counted from the due date for filing of annual
return for the financial year to which demand relates to. The SCN has to be
adjudicated within at period of five years from the due date of filing of
annual return. The SCN is required to be issued at least six months prior to
the time limit set for adjudication. {sec.74(2&10)}

Q.5. Is there any time limit for adjudication the cases?

Answer
(i) In case of section 73(cases other than fraud/ suppression of facts/willful
misstatement), the time limit for adjudication of cases is 3 years from the due
date for filing of annual return for the financial year to which demand relates
to. {sec.73(10)} (ii) In case of section 74(cases of fraud/suppression of
facts/willful misstatement), the time limit for adjudication is 5 years from
the due date for filing of annual return for the financial year to which demand
relates to. {sec.74(10)}

Q.6. Is there any immunity to a person chargeable with tax in
cases of fraud/suppression of facts/ willful misstatement, who pays the amount
of demand along-with interest before issue of notice?

Answer
Yes. Person chargeable with tax, shall have an option to pay the amount of tax
along with interest and penalty equal to 15% percent of the tax involved, as
ascertained either on his own or ascertained by the proper officer, and on such
payment, no notice shall be issued with respect to the tax so paid. {sec.
74(6)}

Q.7. If notice is issued under Section 74 and thereafter the
noticee makes payment, is there any need to adjudicate the case?

Answer
Where the person to whom a notice has been issued under sub-section (1) of
section 74, pays the tax along with interest with penalty equal to 25% of such
tax within 30 days of issue of notice, all proceedings in respect of such
notice shall be deemed to be concluded. {sec.74 (8)}

Q.8. In case a notice is adjudicated under Section 74 and order
issued confirming tax demand and penalty, does the noticee have any option to
pay reduced penalty?

Answer
Yes. if any person pays the tax determined by the order along with interest and
a penalty equivalent to 50% of such tax within thirty days of the communication
of order, all proceedings in respect of the said tax shall be deemed to be
concluded. {sec.74 (11)}

Q.9. What will happen in cases where notice is issued but order
has not been passed under section 73 & 74 within time specified for
adjudication under these sections?

Answer
Section 75 (10) provides for deemed conclusion of the adjudication proceedings
if the order is not issued within time limit prescribed under these sections.

Q.10. What happens if a person collects tax from another person
but does not deposit the same with Government?

Answer
It is mandatory to pay amount, collected from other person representing tax
under this act, to the government. For any such amount not so paid, proper
officer may issue SCN for recovery of such amount and penalty equivalent to
such amount. {Sec.76 (1&2)}

Q.11. In case the person does not deposit tax collected in
contravention of Section 76(1), what is the proper course of action to be
taken?

Answer
SCN may be issued and if so, an order shall be passed following Principles of
natural justice within one year of date of issue of such notice. {sec.76 (2 to
6)}

Q.12. What is the time limit to issue notice in cases under
Section 76 i.e. taxes collected but not paid to Government?

Answer
There is no time limit. Notice can be issued on detection of such cases without
any time limit.

Q.13. What are the modes of recovery of tax available to the
proper officer?

Answer
The proper officer may recover the dues in following manner: a) Deduction of
dues from the amount owned by the tax authorities payable to such person. b)
Recovery by way of detaining and selling any goods belonging to such person, c)
Recovery from other person, from whom money is due or may become due to such
person or who holds or may subsequently hold money for or on account of such
person, to pay to the credit of the Central or a State Government, d) Distrain
any movable or immovable property belonging to such person, until the amount
payable is paid. If the dues not paid within 30days, the said property is to be
sold and with the proceeds of such sale the amount payable and cost of sale
shall be recovered. e) Through the Collector of the district in which such
person owns any property or resides or carries on his business, as if it was an
arrear of land revenue. (f) By way of an application to the appropriate
Magistrate who in turn shall proceed to recover the amount as if it were a fine
imposed by him. (g) Through enforcing the bond /instrument executed under this
Act or any rules or regulations made thereunder. (h) CGST arrears can be
recovered as an arrear of SGST and vice-versa. {sec.79 (1,2,3,4)}

Q.14. Whether the payment of tax dues can be made in installments?

Answer
On receipt of any such request, Commissioner/Chief Commissioner may extend the
time for payment or allow payment of any amount due under the Act, other than
the amount due as per the liability self-assessed in any return, by such person
in monthly installments not exceeding twenty four, subject to payment of
interest under section 50 with such limitations and conditions as may be
prescribed. However, where there is default in payment of any one installment
on its due date, the whole outstanding balance payable on such date shall
become payable and recovered without any further notice. {sec.80}

Q.15. What is the course of recovery in cases where the tax demand
confirmed is enhanced in appeal/ revision proceedings?

Answer
The notice of demand is required to be served only in respect of the enhanced
dues. In so far as the amount already confirmed prior to disposal of
appeal/revision, the recovery proceedings may be continued from the stage at
which such proceedings stood immediately before such disposal of
appeal/revision. (Sec.84(a))

Q.16. . If a taxable person with pending tax dues, transfers his
business to another person, what would happen to the tax dues?

Answer
The person, to whom the business is transferred, shall jointly and severally be
liable to pay the tax, interest or penalty due from the taxable person up to
the time of such transfer, whether such dues has been determined before such
transfer, but has remained unpaid or is determined thereafter. {Sec. 85(1)}

Q.17. What happens to tax dues where the Company (taxable person)
goes into liquidation?

Answer
When any company is wound up, every appointed receiver of assets
("Liquidator") shall give intimation of his appointment to
Commissioner within 30 days. On receipt of such intimation Commissioner may
notify amount sufficient to recover tax liabilities/dues to the liquidator
within 3 months. {Sec. 88(1,2)}

Q.18. What is the liability of directors of the Company (taxable
person) under liquidation?

Answer
When any private company is wound up and any tax or other dues determined
whether before or after liquidation that remains unrecovered, every person who
was a director of the company during the period for which the tax was due,
shall jointly and severally be liable for payment of dues unless he proves to
the satisfaction of the Commissioner that such non-recovery is not attributed
to any gross neglect, misfeasance or breach of duties on his part in relation
to the affairs of the company. {Sec.88(3),89}

Q.19. What is the liability of partners of a partnership firm
(Taxable person) to pay outstanding tax?

Answer
Partners of any firm shall jointly and severally be liable for payment of any
tax, interest or penalty. Firm/ partner shall intimate the retirement of any
partner to the Commissioner by a notice in writing. Liability to pay tax,
interest or penalty up to the date of such retirement, whether determined on
that date or subsequently, shall be on such partner. If no intimation is given
within one month from the date of retirement, the liability of such partner
shall continue until the date on which such intimation is received by the
Commissioner. {Sec.90}

Q.20. What happens to the tax liability of a taxable person, whose
business is carried on by any guardian/ trustee or agent of a minor?

Answer
Where the business in respect of which any tax is payable is carried on by any
guardian / trustee / agent of a minor or other incapacitated person on behalf
of and for the benefit of such minor/incapacitated person, the tax, interest or
penalty shall be levied upon and recoverable from such guardian / trustee /
agent. {Sec.91}

Q.21. What happens when the estate of a taxable person is under
the control of Court of Wards?

Answer
Where the estate of a taxable person owning a business in respect of which any
tax, interest or penalty is payable is under the control of the Court of Wards/
Administrator General / Official Trustee / Receiver or Manager appointed under
any order of a Court, the tax, interest or penalty shall be levied and
recoverable from such Court of Wards/Administrator General / Official Trustee /
Receiver or Manager to the same extent as it would be determined and
recoverable from a taxable person. {Sec.92}

Q.1. Whether any person aggrieved by any order or decision passed
against him has the right to appeal?

Answer
Yes. Any person aggrieved by any order or decision passed under the GST Act(s)
has the right to appeal under Section 107. It must be an order or decision
passed by an "adjudicating authority". However, some decisions or
orders (as provided for in Section 121) are not appealable.

Q.2. What is the time limit to file appeal to Appellate Authority
(AA)?

Answer
For the aggrieved person, the time limit is fixed as 3 months from the date of
communication of order or decision. For the department (Revenue), the time
limit is 6 months within which review proceedings have to be completed and
appeal filed before the AA

Q.3. Whether the appellate authority has any powers to condone the
delay in filing appeal?

Answer
Yes. He can condone a delay of up to one month from the end of the prescribed
period of 3/6 months for filing the appeal (3+1/6+1), provided there is
"sufficient cause"as laid down in the section 107(4).

Q.4. Whether the appellate authority has any powers to allow
additional grounds not specified in the appeal memo?

Answer
Yes. He has the powers to allow additional grounds if he is satisfied that the
omission was not wilful or unreasonable.

Q.5. The order passed by Appellate Authority has to be
communicated to whom?

Answer
Appellate Authority has to communicate the copy of order to the appellant,
respondent and the adjudicating authority with a copy to jurisdictional
Commissioner of CGST and SGST / UTGST.

Q.6. What is the amount of mandatory pre-deposit which should be
made along with every appeal before Appellate Authority?

Answer
Full amount of tax, interest, fine, fee and penalty arising from the impugned
order as is admitted by the appellant and a sum equal to 10% of remaining
amount of tax in dispute arising from the order in relation to which appeal has
been filed.

Q.7. Can the Department apply to AA for ordering a higher amount
of pre-deposit?

Answer
No

Q.8. What about the recovery of the balance amount?

Answer
On making the payment of pre-deposit as above, the recovery of the balance
amount shall be deemed to be stayed, in terms of section 107(7)

Q.9. Whether in an appeal the AA can pass an order enhancing the
quantum of duty/ fine/ penalty/ reduce the amount of refund/ITC from the one
passed by the original authority?

Answer
The AA is empowered to pass an order enhancing the fees or penalty or fine
inlieu of confiscation or reducing the amount of refund or input tax credit
provided the appellant has been given reasonable opportunity of showing cause
against the proposed detrimental order. (First Proviso to Section 107(11)). In
so far as the question of enhancing the duty or deciding wrong availment of ITC
is concerned, the AA can do so only after giving specific SCN to the appellant
against the proposed order and the order itselfshould be passed within the time
limit specified under Section 73 or Section 74. (Second Proviso to Section
107(11)).

Q.10. Does the AA have the power to remand the case back to the
adjudicating authority for whatever reasons?

Answer
No. Section 107(11) specifically states that the AA shall, after making such
inquiry as may be necessary, pass such order, as he thinks just and proper,
confirming, modifying or annulling the decision or order appealed against, but
shall not refer the case back to the authority that passed the decision or
order.

Q.11. Can any CGST/SGST authority r e v i s e a n y order passed
under the Act by his subordinates?

Answer
Section 2(99) of the Act defines "Revisional Authority"as an
authority appointed or authorised under this Act for revision of decision or
orders referred to in section 108. Section 108 of the Act authorizes such
"revisional authority"to call for and examine any order passed by his
subordinates and in case he considers the order of the lower authority to be
erroneous in so far as it is prejudicial to revenue and is illegal or improper
or has not taken into account certain material facts, whether available at the
time of issuance of the said order or not or in consequence of an observation
by the Comptroller and Auditor General of India, he may, if necessary, he can
revise the order after giving opportunity of being heard to the noticee.

Q.12. Can the ?revisional authority? order for staying of
operation of any order passed by his subordinates pending such revision?

Answer
Yes

Q.13. Are there any fetters to the powers of ?revisional
authority? under GST to revise orders of subordinates?

Answer
Yes. The "revisional authority"shall not revise any order if (a) the
order has been subject to an appeal under section 107 or under section 112 or
under section 117 or under section 118, or (b) the period specified under
section 107(2) has not yet expired or more than three years have expired after
the passing of the decision or order sought to be revised. (c) the order has
already been taken up for revision under this Section at any earlier stage.

Q.14. When the Tribunal is having powers to refuse to admit the
appeal?

Answer
In cases where the appeal involves ""tax amount or input tax credit
or "the difference in tax or the difference in input tax credit involved
or "amount of fine, fees or amount of penalty determined by such order,
does not exceed Rs 50,000/-, the Tribunal has discretion to refuse to admit
such appeal. (Section 112(2) of the Act)

Q.15. What is the time limit within which appeal has to be filed
before the Tribunal?

Answer
The aggrieved person has to file appeal before Tribunal within 3 months from t
he date of receipt of the order appealed against. Department has to complete
review proceedings and file appeal within a period of six months from the date
of passing the order under revision.

Q.16. Can the Tribunal condone delay in filing appeal before it
beyond the period of 3/6 months? If so, till what time?

Answer
Yes, the Tribunal has powers to condone delay of a further three months, beyond
the period of 3/6 months provided sufficient cause is shown by the appellant
for such delay

Q.17. What is the time limit for filing memorandum of cross
objections before Tribunal?

Answer
Yes. As per Section 115 of the Act, where an amount deposited by the appellant
under sub-section (6) of section 107 or under sub-section (8) of section 112 is
required to be refunded consequent to any order of the Appellate Authority or
of the Appellate Tribunal, as the case may be, interest at the rate specified
under section 56 shall be payable in respect of such refund from the date of
payment of the amount till the date of refund of such amount.

Q.19. An appeal from the order of Tribunal lies to which forum?

Answer
Appeal against orders passed by the State Bench or Area Benches of the Tribunal
lies to the High Court if the High Court is satisfied that such an appeal
involves a substantial question of law. (Section 117(1)). However, appeal
against orders passed by the National Bench or Regional Benches of the Tribunal
lies to the Supreme Court and not High Court. (Under section 109(5) of the Act,
only the National Bench or Regional Benches of the Tribunal can decide appeals
where one of the issues involved relates to the place of supply.)

Q.20. What is the time limit for filing an appeal before the High
Court?

Answer
180 days from the date of receipt of the order appealed against. However, the
High Court has the power to condone further delay on sufficient cause being
shown.

Answer
As per section 95 of CGST/SGST Law and section 12 of UTGST law, "advance
ruling"means a decision provided by the authority or the Appellate
Authority to an applicant on matters or on questions specified in section 97(2)
or 100(1) of CGST/SGST Act as the case may be, in relation to the supply of
goods and/or services proposed to be undertaken or being undertaken by the
applicant

Q.2. Which are the questions for which advance ruling can be
sought?

Answer
Advance Ruling can be sought for the following questions: (a) classification of
any goods or services or both, (b) applicability of a notification issued under
provisions of the GST Act(s), (c) determination of time and value of supply of
goods or services or both, (d) admissibility of input tax credit of tax paid or
deemed to have been paid, (e) determination of the liability to pay tax on any
goods or services under the Act, (f) whether applicant i s required to be
registered under the Act, (g) whether any particular thing done by the
applicant with respect to any goods or services amounts to or results in a
supply of goods or services, within the meaning of that term.

Q.3. What is the objective of having a mechanism of Advance
Ruling?

Answer
The broad objective for setting up such an authority is to: i. provide
certainty in tax liability in advance in relation to an activity proposed to be
undertaken by the applicant, ii. attract Foreign Direct Investment (FDI), iii.
reduce litigation, iv. pronounce ruling expeditiously in transparent and
inexpensive manner

Q.4. What will be the composition of Authority for advance rulings
(AAR) under GST?

Q.5. Is it necessary for a person seeking advance ruling to be
registered?

Answer
No, any person registered under the GST Act(s) or desirous of obtaining
registration can be an applicant. (Section 95(b))

Q.6. At what time an application for advance ruling be made?

Answer
An applicant can apply for advance ruling even before taking up a transaction
(proposed supply of goods or services) or in respect of a supply which is being
undertaken. The only restriction is that the question being raised is already
not pending or decided in any proceedings in the case of applicant

Q.7. In how much time will the Authority for Advance Rulings have
to pronounce its ruling?

Answer
As per Section 98(6) of CGST/SGST Act, the Authority shall pronounce its ruling
in writing within ninety days from the date of receipt of application.

Q.8. What is the Appellate authority for advance ruling (AAAR)?

Answer
Appellate authority for advance ruling (AAAR), shall be constituted under the
SGST Act or UTGST Act and such AAAR shall be deemed to be the Appellate
Authority under the CGST Act in respect of the respective state or Union
Territory. An applicant, or the jurisdictional officer, if aggrieved by any
advance ruling, may appeal to the Appellate Authority.

Q.9. How many AAR and AAAR will be constituted under GST?

Answer
There will be one AAR and AAAR for each State

Q.10. To whom will the Advance Ruling be applicable?

Answer
Section 103 provides that an advance ruling pronounced by AAR or AAAR shall be
binding only on the applicant who sought it in respect of any matter referred
to in 97 (2) and on the jurisdictional tax authority of the applicant. This
clearly means that an advance ruling is not applicable to similarly placed
taxable persons in the State. It is only limited to the person who has applied
for an advance ruling.

Q.11. Whether the advance ruling have precedent value of a
judgment of the High Court or the Supreme Court?

Answer
No, the advance ruling is binding only in respect of the matter referred. It
has no precedent value. However, even for persons other than applicant, it does
have persuasive value

Q.12. What is the time period for applicability of Advance Ruling?

Answer
The law does not provide for a fixed time period for which the ruling shall
apply. Instead, in section 1 0 3 ( 2 ), it is provided that advance ruling
shall be binding till the period when the law, facts or circumstances
supporting the original advance ruling have changed. Thus, a ruling shall
continue to be in force so long as the transaction continues and so long as
there is no change in law, facts or circumstances.

Q.13. Can an advance ruling given be nullified?

Answer
Section 104(1) provides that an advance ruling shall be held to be ab initio
void if the AAR or AAAR finds that the advance ruling was obtained by the
applicant by fraud or suppression of material facts or misrepresentation of
facts. In such a situation, all the provisions of the GST Act(s) shall apply to
the applicant as if such advance ruling had never been made (but excluding the
period when advance ruling was given and up to the period when the order
declaring it to be void is issued). An order declaring advance ruling to be
void can be passed only after hearing the applicant.

Q.14. What is the procedure for obtaining Advance Ruling?

Answer
Section 97 and 98 deals with procedure for obtaining advance ruling. Section 97
provides that the applicant desirous of obtaining advance ruling should make
application to AAR in a prescribed form and manner. The format of the form and
the detailed procedure for making application will be prescribed in the Rules.
Section 98 provides the procedure for dealing with the application for advance
ruling. The AAR shall send a copy of application to the officer in whose
jurisdiction the applicant falls and call for all relevant records. The AAR may
then examine the application along with the records and may also hear the
applicant. Thereafter AAR will pass an order either admitting or rejecting the
application.

Q.15. Under what circumstances will the application for Advance
Ruling be compulsorily rejected?

Answer
Application has to be rejected if the question raised in the application is
already pending or decided in any proceedings in the case of applicant under
any of the provisions of GST Act(s) If the application is rejected, it should
be by way of a speaking order giving the reasonsfor rejection

Q.16. What is the procedure to be followed by AAR once the
application is admitted?

Answer
If the application is admitted, the AAR shall pronounce its ruling within
ninety days of receipt of application. Before giving its ruling, it shall
examine the application and any further material furnished by the applicant or
by the concerned departmental officer. Before giving the ruling, AAR must hear
the applicant or his authorized representative as well as the jurisdictional
officers of CGST/SGST/UTGST.

Q.17. What happens if there is a difference of opinion amongst
members of AAR?

Answer
If there is difference of opinion between the two members of AAR, they shall
refer the point or points on which they differ to the AAAR for hearing the
issue. If the members of AAAR are also unable to come to a common conclusion in
regard to the point(s) referred to them by AAR, then it shall be deemed that no
advance ruling can be given in respect of the question on which difference
persists at the level of AAAR.

Q.18. What are the provisions for appeals against order of AAR?

Answer
The provisions of appeal before AAAR are dealt in section 100 and 101 of
CGST/SGST Act or section 14 of the UTGST Act. Ifthe applicantis
aggrievedwiththe finding ofthe AAR, he can file an appeal with AAAR. Similarly,
if the concerned or jurisdictional officer of CGST/SGST/UTGST does not agree
with the finding of AAR, he can also file an appeal with AAAR. The word
concerned officer of CGST/SGST means an officer who has been designated by the
CGST/SGST administration in regard to an application for advance ruling. In
normal circumstances, the concerned officer will be the officer in whose
jurisdiction the applicant is located. In such cases the concerned officer will
be the jurisdictional CGST/SGST officer. Any appeal must be filed within thirty
days from the receipt of the advance ruling. The appeal has to be in prescribed
form and has to be verified in prescribed manner. This will be prescribed in
the Model GST Rules. The Appellate Authority must pass an order after hearing
the parties to the appeal within a period of ninety days of the filing of an
appeal. If members of AAAR differ on any point referred to in appeal, it shall
be deemed that no advance ruling is issued in respect of the question under
appeal.

Q.19. Whether Appeal can be filed before High Court or Supreme
Court against the ruling of Appellate Authority for Advance Rulings?

Answer
The CGST /SGST Act do not provide for any appeal against the ruling of
Appellate Authority for Advance Rulings. Thus no further appeals lie and the
ruling shall be binding on the applicant as well as the jurisdictional officer
in respect of applicant. However, Writ Jurisdiction may lie before Hon"ble
High Court or the Supreme Court.

Q.20. Can the AAR & AAAR order for rectification of mistakes
in the ruling?

Answer
Yes, AAR and AAAR h a v e p o w e r to amend their order to rectify any mistake
apparent from the record within a period of six months from the date of the
order. Such mistake may be noticed by the authority on its own accord or may be
brought to its notice by the applicant or the concerned or the jurisdictional
CGST/SGST officer. If a rectification has the effect of enhancing the tax
liability or reducing the quantum of input tax credit, the applicant or the
appellant must be heard before the order is passed. (Section 102)

Answer
As per law dictionary and as noted in differentjudicial pronouncements, the
term "search", in simple language, denotes an action of a government
machinery to go, look through or examine carefully a place, area, person,
object etc. in order to find something concealed or for the purpose of
discovering evidence of a crime. The search of a person or vehicle or premises
etc. can only be done under proper and valid authority of law.

Q.2. What is the meaning of the term ?Inspection??

Answer
"Inspection"is a new provision under the CGST/SGST Act. It is a
softer provision than search to enable officers to access any place of business
of a taxable person and also any place of business of a person engaged in
transporting goods or who is an owner or an operator of a warehouse or godown.

Q.3. Who can order for carrying out ?Inspection? and under what
circumstances?

Answer
As per Section 67 of CGST/SGST Act, Inspection can be carried out by an officer
of CGST/SGST only upon a written authorization given by an officer of the rank
of Joint Commissioner or above. A Joint Commissioner or an officer higher in
rank can give such authorization only if he has reasons to believe that the
person concerned has done one of the following: i. suppressed any transaction
of supply, ii. suppressed stock of goods in hand, iii. claimed excess input tax
credit, iv. contravened any provision of the CGST/SGST Act to evade tax, v. a
transporter or warehouse owner has kept goods which have escaped payment of tax
or has kept his accounts or goods in a manner that is likely to cause evasion
of tax

Q.4. Can the proper officer authorize Inspection of any
assets/premises of any person under this Section?

Answer
No. Authorization can be given to an officer of CGST/ SGST to carry out
inspection of any of the following: i. any place of business of a taxable
person, ii. any place of business of a person engaged in the business of
transporting goods whether or not he is a registered taxable person, iii. any
place of business of an owner or an operator of a warehouse or godown

Q.5. Who can order for Search and Seizure under the provisions of
CGST Act?

Answer
An officer of the rank of Joint Commissioner or above can authorize an officer
in writing to carry out search and seize goods, documents, books or things.
Such authorization can be given only where the Joint Commissioner has reasons
to believe that any goods liable to confiscation or any documents or books or
things relevant for any proceedings are hidden in any place.

Q.6. What is meant by ?reasons to believe??

Answer
Reason to believe is to have knowledge of facts which, although not amounting
to direct knowledge, would cause a reasonable person, knowing the same facts,
to reasonably conclude the same thing. As per Section 26 of the IPC, 1860,
"A person is said to have "reason to believe"a thing, if he has
sufficient cause to believe that thing but not otherwise.""Reason to
believe"contemplates an objective determination based on intelligent care
and evaluation as distinguished from a purely subjective consideration. It has
to be and must be that of an honest and reasonable person based on relevant
material and circumstances.

Q.7. Is it mandatory that such ?reasons to believe? has to be
recorded in writing by the proper officer, before issuing authorization for
Inspection or Search and Seizure?

Answer
Although the officer is not required to state the reasons for such belief
before issuing an authorization for search, he has to disclose the material on
which his belief was formed. "Reason to believe"need not be recorded
invariably in each case. However, it would be better if the materials /
information etc. are recorded before issue of search warrant or before
conducting search.

Q.8. What is a Search Warrant and what are its contents?

Answer
The written authority to conduct search is generally called search warrant. The
competent authority to issue search warrant is an officer of the rank of Joint
Commissioner or above. A search warrant must indicate the existence of a reasonable
belief leading to the search. Search Warrant should contain the following
details: i. the violation under the Act, ii. the premise to be searched, iii.
the name and designation of the person authorized for search, iv. the name of
the issuing officer with full designation along with his round seal, v. date
and place of issue, vi. serial number of the search warrant, vii. period of
validity i.e. a day or two days etc

Q.9. When does goods become liable to confiscation under the
provisions of CGST/SGST Act?

Answer
As per section 130 of SGST/SGST Act, goods become liable to confiscation when
any person does the following: (i) supplies or receives any goods in
contravention of any of the provisions of this Act or rules made thereunder
leading to evasion of tax, (ii) does not account for any goods on which he is
liable to pay tax under this Act, (iii) supplies any g o o d s liable to tax
under this Act without having applied for the registration, (iv) contravenes
any of the provisions of the CGST/ SGST Act or rules made thereunder with
intent to evade payment of tax.

Q.10. What powers can be exercised by an officer during valid
search?

Answer
An officer carrying out a search hasthe power to search for and seize goods
(which are liable to confiscation) and documents, books or things (relevant for
any proceedings under CGST/SGST Act) from the premises searched. During search,
the officer has the power to break open the door of the premises authorized to
be searched if access to the same is denied. Similarly, while carrying out
search within the premises, he can break open any almirah or box if access to
such almirah or box is denied and in which any goods, account, registers or
documents are suspected to be concealed.He can also sealthe premisesif accessto
it denied.

Q.11. What is the procedure for conducting search?

Answer
Section 67(10) of CGST/SGST Act prescribes that searches must be carried out in
accordance with the provisions of Code of Criminal Procedure, 1973. Section 100
of the Code of Criminal Procedure describes the procedure for search.

Q.12. What are the basic requirements to be observed during Search
operations?

Answer
The following principles should be observed during Search: "No search of
premises should be carried out without a valid search warrant issued by the
proper officer. "There should invariably be a lady officer accompanying
the search team to residence. "The officers before starting the search
should disclose their identity by showing their identity cards to the person
in-charge of the premises. "The search warrant should be executed before
the start of the search by showing the same to the person in-charge of the
premises and his signature should be taken on the body of the search warrant in
token of having seen the same. The signatures of at least two witnesses should
also be taken on the body of the search warrant. "The search should be
made in the presence of at least two independent witnesses of the locality. If
no such inhabitants are available /willing, the inhabitants of any other locality
should be asked to be witness to the search. The witnesses should be briefed
about the purpose of the search. "Before the start of the search
proceedings, the team of officers conducting the search and the
accompanyingwitnessesshouldoffer themselves for their personalsearch to the
person in-charge of the premises being searched. Similarly, after the
completion of search all the officers and the witnesses should again offer
themselves for their personal search. "A Panchnama / Mahazar of the proceedings
of the search should necessarily be prepared on the spot. A list of all goods,
documents recovered and seized/detained should be prepared and annexed to the
Panchnama/Mahazar. The Panchnama / Mahazar and the list of goods/ documents
seized/detained should invariably be s i g n e d b y t h e w i t n e s s e s, t
h e i n - charge/ owner of the premises before whom the search is conducted and
also by the officer(s) duly authorized for conducting the search. "After
the search is over, the search warrant duly executed should be returned in
original to the issuing officer with a report regarding the outcome of the
search. The names of the officers who participated in the search may also be
written on the reverse of the search warrant. "The issuing authority of search
warrant should maintain register of records of search warrant issued and
returned and used search warrants should be kept in records. "A copy of
the Panchnama / Mahazar along with its annexure should be given to the person
incharge/owner of the premises being searched under acknowledgement.

Q.13. Can a CGST/SGST officer access business premises under any
other circumstances?

Answer
Yes. Access can also be obtained in terms of Section 65 of CGST/SGST Act. This
provision of law is meant to allow an audit party of CGST/SGST or C&AG or a
cost accountant or chartered accountant nominated under section 66 of CGST/SGST
Act, access to any business premises without issuance of a search warrant for
the purposes of carrying out any audit, scrutiny, verification and checks as
may be necessary to safeguard the interest of revenue. However, a written
authorization is to be issued by an officer of the rank of Commissioner of CGST
or SGST. This provision facilitates access to a business premise which is not
registered by a taxable person as a principal or additional place of business
but has books of accounts, documents, computers etc. which are required for
audit or verification of accounts of a taxable person.

Q.14. What is meant by the term ?Seizure??

Answer
The term "seizure"has not been specifically defined in the Model GST
Law. In Law Lexicon Dictionary, "seizure"is defined as the act of
taking possession of property by an officer under legal process. It generally
implies taking possession forcibly contrary to the wishes of the owner of the
property or who has the possession and who was unwilling to part with the
possession.

Q.15. Does GST Act(s) h a ve any power of d et ent ion of goods
and conveyances?

Answer
Yes, under Section 129 of CGST/SGST Act, an officer has power to detain goods
along with the conveyance (like a truck or other types of vehicle) transporting
the goods. This can be done for such goods which are being transported or are
stored in transit in violation of the provisions of CGST/SGST Act. Goods which
are stored or are kept in stock but not accounted for can also be detained.
Such goods and conveyance shall be released after payment of applicable tax or
upon furnishing security of equivalent amount.

Q.16. Whatis the distinction in law between ?Seizure? and
?Detention??

Answer
Denial of access to the owner of the property or the person who possesses the
property at a particular point of time by a legal order/notice is called
detention. Seizure is taking over of actual possession of the goods by the department.
Detention order is issued when it is suspected that the goods are liable to
confiscation. Seizure can be made only on the reasonable belief which is
arrived at after inquiry/investigation that the goods are liable to
confiscation.

Q.17. What are the safeguards provided in G S T A c t ( s ) in
respect of Search or Seizure?

Answer
Certain safeguards are provided in section 67 of CGST/SGST Act in respect of
the power of search or seizure. These are as follows: i. Seized goods o r
documents should n o t be retained beyond the period necessary for their
examination, ii. Photocopies of the documents can be taken by the person from
whose custody documents are seized, iii. For seized goods, if a notice is not
issued within six months of its seizure, goods shall be returned to the person
from whose possession it was seized. This period of six months can be extended
on justified grounds up to a further period of maximum six months, iv. An
inventory of seized goods shall be made by the seizing officer, v. Certain
categories of goods to be specified under CGST Rules (such as perishable,
hazardous etc.) can be disposed of immediately after seizure, vi. Provisions of
Code of Criminal Procedure 1973 relating to search and seizure shall apply.
However, one important modification is in relation to sub-section (5) of
section 165 of Code of Criminal Procedure "instead of sending copies of
any record made in course of search to the nearest Magistrate empowered to take
cognizance of the offence, it has to be sent to the Principal Commissioner/
Commissioner of CGST/ Commissioner of SGST.

Q.18. Is there any special document required to be carried during
transport of taxable goods?

Answer
Under section 68 of CGST /SGST Act, a person in charge of a conveyance carrying
any consignment of goods of value exceeding a specified amount may be required
to carry a prescribed document as may be prescribed.

Q.19. What is meant by the term ?arrest??

Answer
The term "arrest"has not been defined in the CGST/SGST Act. However,
as per judicial pronouncements, it denotes "the taking into custody of a
person under some lawful command or authority". In other words, a person
is said to be arrested when he is taken and restrained of his liberty by power
or colour of lawful warrant.

Q.20. When can the proper officer authorize ?arrest? of any person
under CGST / SGST Act?

Answer
The Commissioner of CGST/SGST can authorize a CGST/SGST officer to arrest a
person if he has reasons to believe that the person has committed an offence
attracting a punishment prescribed under section 132(1) (a), (b), (c), (d) or
Sec 132(2) of the CGST/SGST Act. This essentially means that a person can be
arrested only where the tax evasion is more than 2 crore rupees or where a he
has been convicted earlier under CGST Act.

Q.21. What are the safeguards provided under CGST /SGST Act for a
person who is placed under arrest?

Answer
There are certain safeguards provided under section 69 for a person who is
placed under arrest. These are: a. If a person is arrested for a cognizable
offence, he must be informed in writing of the grounds of arrest and he must be
produced before a magistrate within 24 hours of his arrest, i. If a person is
arrested for a noncognizable and bailable offence, the Deputy/ Assistant
Commissioner of CGST/SGST can release him on bail and he will be subject to the
same provisions as an officer in-charge of a police station under section 436
of the Code of Criminal Procedure, 1973, ii. All arrest must be in accordance
with the provisions of the Code of Criminal Procedure,1973 relating to arrest.

Q.22. What are the precautions to be taken during arrest?

Answer
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to
arrest and the procedure thereof must be adhered to. It is therefore necessary
that all field officers of CGST/SGST be fully familiar with the provisions of
the Code of Criminal Procedure, 1973. One important provision to be taken note
of is section 57 of Cr.P.C., 1973 which provides that a person arrested without
warrant shall not be detained for a longer period than, under the circumstances
of the case, is reasonable but this shall not exceed twenty four hours
(excluding the journey time from place of arrest to the Magistrate"s
court). Within this period, as provided under section 56 of Cr.P.C., the person
making the arrest shall send the person arrested without warrant before a
Magistrate having jurisdiction in the case. In a landmark judgment in the case
of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416, the Hon"ble
Supreme Court has laid down specific guidelines required to be followed while
making arrests. While thisisin relation to police, it needs to be followed by
all departments having power of arrest. These are as under: i. The police
personnel carrying out the arrest and handling the interrogation ofthe arrestee
should bear accurate, visible and clear identification and name tags with their
designations. The particulars of all such police personnel who handle
interrogation of the arrestee must be recorded in a register. ii. The police
officer carrying out the arrest shall prepare a memo of arrest at the time of
arrest and such memo shall be attested by at least one witness, who may be
either a member of the family of the arrestee or a respectable person of the
locality from where the arrest is made. It shall also be counter signed by the
arrestee and shall contain the time and date of arrest. iii. A person who has
been arrested or detained and is being held in custody in a police station or
interrogation center or other lock up, shall be entitled to have one friend or
relative or other person known to him or having interest in his welfare being
informed, as soon as practicable, that he has been arrested and is being
detained at the particular place, unless the attesting witness of the memo of
arrest is himself such a friend or a relative of the arrestee. iv. The time,
place of arrest and venue of custody of an arrestee must be notified by the
police where the next friend or relative of the arrestee lives outside the
district or town through the Legal Aid Organization in the District and the
police station of the area concerned telegraphically within a period of 8 to 12
hours after the arrest. v. An entry must be made in the diary at the place of
detention regarding the arrest of the person which shall also disclose the name
of the next friend of the person who has been informed of the arrest and the
names and particulars of the police officials in whose custody the arrestee is.
vi. The arrestee should, where he so requests, be also examined at the time of
his arrest and major and minor injuries, if any present on his/her body, must
be recorded at that time. The "Inspection Memo"must be signed both by
the arrestee and the police officer effecting the arrest and its copy provided
to the arrestee. vii. The arrestee should be subjected to medical examination
by the trained doctor every 48 hours during his detention in custody by a
doctor on the panel of approved doctors appointed by Director, Health Services
of the concerned State or Union Territory, Director, Health Services should
prepare such a panel for all Tehsils and Districts as well. viii. Copies of all
the documents including the memo of arrest, referred to above, should be sent
to the Magistrate for his record. ix. The arrestee may be permittedto meet
hislawyer during interrogation, though not throughout the interrogation. x. A
police control room should be provided at all district and State headquarters
where information regarding the arrest and the place of custody of the arrestee
shall be communicated by the officer causing the arrest, within 12 hours of
effecting the arrest and at the police control room it should be displayed on a
conspicuous notice board.

Q.23. What are the broad guidelines for arrest followed in CBEC?

Answer
Decision to arrest needs to be taken on case-tocase basis considering various
factors, such as, nature and gravity of offence, quantum of duty evaded or
credit wrongfully availed, nature and quality of evidence, possibility of
evidences being tampered with or witnesses being influenced, cooperation with
the investigation, etc. Power to arrest has to be exercised after careful
consideration of the facts of the case which may include: i. to ensure proper
investigation of the offence, ii. to prevent such person from absconding, iii.
cases involving organized smuggling of goods or evasion of customs duty by way
of concealment, iv. master minds or key operators effecting proxy/ benami
imports/exports in the name of dummy or non-existent persons/IECs, etc., v.
where the intent to evade duty is evident and element of mensrea/guilty mind is
palpable, vi. prevention of the possibility of tampering with evidence, vii.
intimidating or influencing witnesses, and viii. large amounts of evasion of duty
or service tax at least exceeding one crore rupees.

Q.24. What is a cognizable offence?

Answer
Generally, cognizable offence means serious category of offences in respect of
which a police officer has the authority to make an arrest without a warrant
and to start an investigation with or without the permission of a court.

Q.25. What is a non-cognizable offence?

Answer
Non-cognizable offence means relatively less serious offences in respect of
which a police officer does not have the authority to make an arrest without a
warrant and an investigation cannot be initiated without a court order.

Q.26. What are cognizable and non-cognizable offences under CGST
Act?

Answer
In section 132 of CGST Act, it is provided that the offences relating to
taxable goods and /or services where the amount of tax evaded or the amount of
input tax credit wrongly availed or the amount of refund wrongly taken exceeds
Rs. 5 crore, shall be cognizable and nonbailable. Other offences under the act
are non-cognizable and bailable.

Q.27. "When can the proper officer issue summons

Answer

Q.28. What are the responsibilities of the person so summoned?

Answer
A person who is issued summon is legally bound to attend either in person or by
an authorized representative and he is bound to state the truth before the
officer who has issued the summon upon any subject which is the subject matter
of examination and to produce such documents and other things as may be
required.

Q.29. What can be the consequences of nonappearance to summons?

Answer
The proceeding before the official who has issued summons is deemed to be a
judicial proceeding. If a person does not appear on the date when summoned
without any reasonable justification, he can be prosecuted under section 174 of
the Indian Penal Code (IPC). If he absconds to avoid service of summons, he can
be prosecuted under section 172 of the IPC and in case he does not produce the
documents or electronic records required to be produced, he can be prosecuted
under section 175 of the IPC. In case he gives false evidence, he can be
prosecuted under section 193 of the IPC. In addition, if a person does not
appear before a CGST/ SGST officer who has issued the summon, he is liable to a
penalty up to Rs 25,000/- under section 122(3)(d) of CGST/SGST Act.

Q.30. What are the guidelines for issue of summons?

Answer
The Central Board of Excise and Customs (CBEC) in t h e D e p a r t m e n t o f
R e v e n u e , M i n i s t r y o f F i n a n c e has issued guidelines from
time to time to ensure that summons provisions are not misused in the field.
Some of the important highlights of these guidelines are given below: i.
summons are to be issued as a last resort where assesses are not co-operating
and this section should not be used for the top management, ii. the language
ofthe summons should not be harsh and legal which causes unnecessary mental
stress and embarrassment to the receiver, iii. summons by Superintendents
should be issued after obtaining prior written permission from an officer not
below the rank of Assistant Commissioner with the reasons for issuance of
summons to be recorded in writing, iv. where for operational reasons, it is not
possible to obtain such prior written permission, oral/ telephonic permission
from such officer must be obtained and the same should be reduced to writing
and intimated to the officer according such permission at the earliest
opportunity, v. in all cases, where summons are issued, the officer issuing
summons should submit a report or should record a brief of the proceedings in
the case file and submit the same to the officer who had authorized the
issuance of summons, vi. senior management officials such as CEO, CFO, General
Managers of a large company or a Public Sector Undertaking should not generally
be issuedsummonsatthe firstinstance.They should be summoned only when there are
indications in the investigation of their involvement in the decision making
process which led to loss of revenue.

Q.31. What are the precautions to be observed while issuing
summons?

Answer
The following precautions should generally be observed when summoning a person:
- (i) A summon should not be issued for appearance where it is not justified.
The power to summon can be exercised only when there is an inquiry being
undertaken and the attendance of the person is considered necessary. (ii)
Normally, summons should not be issued repeatedly. As far as practicable, the
statement of the accused or witness should be recorded in minimum number of
appearances. (iii) Respect the time of appearance given in the summons. No
person should be made to wait for long hours before his statement is recorded
except when it has been decided very consciously as a matter of strategy. (iv)
Preferably, statements should b e recorded during office hours, however, an
exception could be made regarding time and place of recording statement having
regard to the facts in the case.

Q.32. Are there any class of officers whoare required to assist
CGST/SGST officers?

Answer
Under section 72 of CGST/SGST Act, the following officers have been empowered
and are required to assist CGST/SGST officers in the execution of CGST/SGST
Act. The categoriesspecified are as follows: i. Police, ii. Railways iii.
Customs, iv. Officers of State/UT/ Central Government engaged in collection of
GST, v. Officers of State/UT/ Central Government engaged in collection of land
revenue, vi. All village officers, vii. Any other class of officers as may be
notified by the Central/State Government.

Answer
The CGST/SGST Act codifiesthe offences and penalties in Chapter XVI. The Act
lists 21 offences in section 122, apart from the penalty prescribed under section
1 0 for availing compounding by a taxable person who is not eligible for it.
The said offences are as follows: - 1) Making a supply without invoice or with
false/ incorrect invoice, 2) Issuing an invoice without making supply, 3) Not
paying tax collected for a period exceeding three months, 4) Not paying tax
collected in contravention of the CGST/SGST Act for a period exceeding 3
months, 5) Non deduction or lower deduction of tax deducted at source or not
depositing tax deducted at source under section 51, 6) Non collection or lower
collection of or nonpayment of tax collectible at source under section 52, 7)
Availing/utilizing input tax credit without actual receipt of goods and/or
services, 8) Fraudulently obtaining any refund, 9) Availing/distributing input
tax credit by an Input Service Distributor in violation of Section 20, 10)
Furnishing false information or falsification of financial records or
furnishing of fake accounts/ documents with intent to evade payment of tax, 11)
Failure to register despite being liable to pay tax, 12) Furnishing false
information regarding registration particulars either at the time of applying
for registration or subsequently, 13) Obstructing or preventing any official in
discharge of his duty, 14) Transporting goods without prescribed documents, 15)
Suppressing turnover leading to tax evasion, 16) Failure to maintain
accounts/documents in the manner specified in the Act or failure to retain
accounts/documents for the period specified in the Act, 17) Failure to furnish
information/documents required by an officer in terms of the Act/Rules or
furnishing false information/documents during the course of any proceeding, 18)
Supplying/transporting/storing any goods liable to confiscation, 19) Issuing
invoice or document using GSTIN of another person, 20) Tampering/destroying any
material evidence, 21) Disposing of /tampering with goods detained/
seized/attached under the Act.

Q.2. What is meant by the term penalty?

Answer
The word "penalty"has not been defined in the CGST/SGST Act but
judicial pronouncements and principles of jurisprudence have laid down the
nature of a penalty as: "a temporary punishment or a sum of money imposed
by statute, to be paid as punishment for the commission of a certain offence,
"a punishment imposed by law or contract for doing or failing to do
something that was the duty of a party to do

Q.3. What are the general disciplines to be followed while
imposing penalties?

Answer
The levy of penalty is subject to a certain disciplinary regime which is based
on jurisprudence, principles of natural justice and principles governing
international trade and agreements. Such general discipline is enshrined in
section 126 of the Act. Accordingly""no penalty is to be imposed
without issuance of a show cause notice and proper hearing in the matter,
affording an opportunity to the person proceeded against to rebut the
allegations levelled against him, "the penalty is to depend on the
totality of the facts and circumstances of the case, "the penalty imposed is
to be commensurate with the degree and severity of breach of the provisions of
the law or the rules alleged, "the nature ofthe breach isto be specified
clearly in the order imposing the penalty, "the provisions ofthe law under
which the penalty has been imposed is to be specified. Section 126 further
specifies that, in particular, no substantial penalty is to be imposed for
""any m i n o r b r e a c h ( minor b r e a c h h a s b e e n defined
as a violation of the provisions in a case where the tax involved is less than
Rs.5000), or "a procedural requirement of the law, or "an easily
rectifiable mistake/omission in documents (explained in the law as an error
apparent on record)that has been made without fraudulent intent or gross
negligence. Further, wherever penalty of a fixed amount or a fixed percentage
has been provided in the CGST/SGST Act, the same shall apply.

Q.4. What is the quantum of penalty provided for in the CGST /SGST
Act?

Answer
Section 122(1) provides that any taxable person who has committed any of the
offences mentioned in section 122 shall be punished with a penalty that shall
be higher of the following amounts: "The amount oftax evaded, fraudulently
obtained as refund, availed as credit, or not deducted or collected or short
deducted or short collected, or "A sum of Rs. 10,000/-. Further Section
122(2) provides that any registered person who has not paid tax or makes a
short payment of taxon suppliesshall be a liable to penalty which will be the
higher of: "10% of the tax not paid or short paid, or "Rs. 10,000/-

Q.5. Is any penalty prescribed for any person other than the
taxable person?

Answer
Yes. Section 122(3) provides for levy of penalty extending to Rs. 25,000/- for
any person who- "aids or abets any of the 21 offences, "deals in any
way (whether receiving, supplying, storing or transporting) with goods that are
liable to confiscation, "receives or d e al s w it h s u p p ly o f s er v
ic e s i n contravention of the Act, "fails to appear before an authority
who has issued a summon, "fails to issue any invoice for a supply or
account for any invoice in his books of accounts

Q.6. What is the penalty provided for any contravention for which
no separate penalty has been prescribed under CGST/SGST Act?

Answer
Section 125 of the CGST/SGST Act provides that any person who contravenes any
provision of the Act or the rules made under this Act for which no separate
penalty has been prescribed shall be punishable with a penalty that may extend
to Rs. 25,000/-

Q.7. What action can be taken for transportation of goods without
valid documents or attempted to be removed without proper record in books?

Answer
If any person transports any goods or stores any such goods while in transit
without the documents prescribed under the Act (i.e. invoice and a declaration)
or supplies or stores any goods that have not been recorded in the books or
accounts maintained by him, then such goods shall be liable for detention along
with any vehicle on which they are being transported. Where owner comes
forward: - Such goods shall be released on payment of the applicable tax and
penalty equal to 100% tax or upon furnishing of security equivalent to the said
amount. In case of exempted goods, penalty is 2% of value of goods or Rs
25,000/- whichever is lesser. Where owner does not come forward: - Such goods
shall be released on payment of the applicable tax and penalty equal to 50% of
value of goods or upon furnishing of security equivalent to the said amount. In
case of exempted goods, penalty is 5% of value of goods or Rs 25,000/- whichever
is lesser.

Q.8. What is the penalty prescribed for a person who opts for
composition scheme despite being ineligible for the said scheme?

Answer
Section 10(5) provides that if a person who has paid under composition levy is
found as not being eligible for compounding then such person shall be liable to
penalty to an amount equivalent to the tax payable by him under the provisions
of the Act i.e. as a normal taxable person and that this penalty shall be in
addition to the tax payable by him.

Q.9. What is meant by confiscation?

Answer
The word "confiscation"has not been defined in the Act. The concept
is derived from Roman Law wherein it meant seizing or taking into the hands of
emperor, and transferring to Imperial "fiscus"or Treasury. The word
"confiscate"has been defined in Aiyar"s Law Lexicon as to
"appropriate (private property) to the public treasury by way of penalty,
to deprive of property as forfeited to the State."In short in means
transfer of the title to the goods to the Government.

Q.10. Under which circumstances can goods be confiscated under
CGST/SGST Act?

Answer
Under Section 70 of the CGST Act, goods shall be liable to confiscation if any
person: "supplies or receives any goods in contravention of any provision
of this Act and such contravention results in evasion of tax payable under the
Act, or "does not account for any goods in the manner required under the
Act, or "supplies goods that are liable to tax under the Act without
applying for registration, or "uses any conveyance as a means of transport
for carriage of goods in contravention of the provisions of CGST/SGST Act
(unless used without knowledge of owner) "contravenes any provision of the
Act/Rules with the intention of evading payment of tax.

Q.11. What happens to the goods upon confiscation of goods by the
proper officer?

Answer
Upon confiscation, the title in the confiscated goods shall vest in the
Government and every Police officer to whom the proper officer makes a request
in this behalf, shall assist in taking possession of the goods

Q.12. After confiscation, is it required to give option to the
person to redeem the goods?

Answer
Yes. In terms of section 130(2), the Owner or the person in-charge of the goods
liable to confiscation is to be given the option for fine (not exceeding market
price of confiscated goods) in lieu of confiscation. This fine shall be in
addition to the tax and other charges payable in respect of such goods.

Q.13. Can any conveyance carrying goods without cover of
prescribed documents be subject to confiscation?

Answer
Yes. Section 130 provides that any conveyance carrying goods without the cover
of any documents or declaration prescribed under the Act shall be liable to
confiscation. However, if the owner of the conveyance proves that the goods
were being transported without cover of the required documents/declarations
without his knowledge or connivance or without the knowledge or connivance of
his agent then the conveyance shall not be liable to confiscation as aforesaid.

Q.14. What is Prosecution?

Answer
Prosecution is the institution or commencement of legal proceeding, the process
of exhibiting formal charges against the offender. Section 198 of the Criminal
Procedure Code defines "prosecution"as the institution and carrying
on of the legal proceedings against a person.

Q.15. Which are the offences which warrant prosecution under the
CGST/SGST Act?

Answer
Section 73 of the CGST/SGST Act codifies the major offences under the Act which
warrant institution of criminal proceedings and prosecution. 12 such major
offences have been listed as follows: a) Making a supply without issuing an
invoice or upon issuance of a false/incorrectinvoice, b) Issuing an invoice
without making supply, c) Not paying any amount collected as tax for a period
exceeding 3 months, d) Availing or utilizing credit of input tax without actual
receipt of goods and/or services, e) Obtaining any fraudulentrefund) f) evades
tax, fraudulently avails ITC or obtains refund by an offence not covered under
clause (a) to (e), g) Furnishing false information or falsification of
financial records or furnishing of fake accounts/ documents with intent to
evade payment of tax, h) Obstructing or preventing any official in the
discharge of his duty, i) Dealing with goods liable to confiscation i.e. receipt,
supply, storage or transportation of goods liable to confiscation, j)
Receiving/dealing wit h su pply of ser vices in contravention of the Act, k)
tampers with or destroys any material evidence or documents l) Failing to
supply any information required of him under the Act/Rules or supplying false
information, m) Attempting to commit or abetting the commission of any of the
offences at (a) to (l) above.

Q.16. What is the punishment prescribed on conviction of any
offence under the CGST/SGST Act?

Answer
The scheme of punishment provided in section 132(1) is as follows:

Offence involving--

Punishment (Imprisonment extending to--)

Tax evaded exceeding
Rs. 5 crore or repeat offender250 lakh

5 years and fine

Taxevaded between Rs. 2 crore andRs.5crore

3 years and fine

Tax evaded between Rs.1 crore and Rs.2 crore

1 years and fine

·False
records

·Obstructing
officer

·Tamper
records

6 months

Q.17. What are cognizable and non-cognizable offences under
CGST/SGST Act?

Answer
In terms of Section 132(4) and 132(5) of CGST/SGST Act "all offences where
the evasion of tax is less than Rs.5 crores shall be non-cognizable and
bailable, "all offences where the evasion of tax exceeds Rs.5 crores shall
be cognizable and non- bailable.

Answer
Yes. No person shall be prosecuted for any offence without the prior sanction
of the designated authority.

Q.19. Is ?mensrea? or culpablemental state necessary for
prosecution under CGST/SGST Act?

Answer
Yes. However, Section 135 presumes the existence of a state of mind (i.e.
"culpable mental state"or mensrea) required to commit an offence if
it cannot be committed without such a state of mind

Q.20. What is a culpable state of mind?

Answer
While committing an act, a "culpable mental state"is a state of mind
wherein- "the act is intentional, "the act and its implications are
understood and controllable, "the person committing the act was not
coerced and even overcomes hurdles to the act committed, "the person
believes or has reasons to believe that the act is contrary to law.

Q.21. Can a company be proceeded against or prosecuted for any
offence under the CGST/SGST Act?

Answer
Yes. Section 137 of the CGST/SGST ACT provides that every person who was in-charge
of or responsible to a company for the conduct of its business shall,
along-with the company itself, be liable to be proceeded against and punished
for an offence committed by the company while such person was in-charge of the
affairs of the company. If any offence committed by the company""has
been committed with the consent/ connivance of, or "is attributable to
negligence of"any officer ofthe company then such officer shall be deemed
to be guilty of the said offence and liable to be proceeded against and
punished accordingly

Answer
Yes. As per section 138 of the CGST/SGST Act, any offence, other than the
following, may upon payment of the prescribed (compounding) amount be
compounded and such compounding is permissible either before or after the
institution of prosecution: "Offences numbered 1 to 6 of the 12 major
offences (outlined in Q. 16 above), if the person charged with the offence had
compounded earlier in respect of any of the said offences,
"Aiding/abetting offences numbered 1 to 6 of the 12 major offences, if the
person charged with the offence had compounded earlier in respect of any of the
said offences, "Any offence (other than the above offences) under any SGST
Act/IGST Act in respect of a supply with value exceeding Rs.1 crore, if the
person charged with the offence had compounded earlier in respect of any of the
said offences, "Any offence which is also an offence under NDPSA or FEMA
or any other Act other than CGST/SGST, Compounding is to be permitted only
after payment of tax, interest and penalty and compounding shall not affect any
proceeding already instituted under any other law.

Q.24. Are there any monetary limits prescribed for compounding of
offence?

Answer
Yes. The lower limit for compounding amount is to be the greater of the
following amounts: - "50% of tax involved, or "Rs. 10,000. The upper
limit for compounding amount is to be greater of the following amounts: -
"150% of tax involved or "Rs. 30,000.

Q.25. What is the consequence of compounding of an offence under CGST/SGST
Act?

Answer
Sub-section (3) of section 138 provides that on payment of compounding amount
no further proceeding to be initiated under this Act and criminal proceeding
already initiated shall stand abated.

Answer
"Integrated Goods and Services Tax"(IGST) means tax levied under the
IGST Act on the supply of any goods and/ or services in the course of
inter-State trade or commerce

Q.2. What are inter-state supplies?

Answer
A supply of goods and/or services in the course of inter-State trade or
commerce means any supply where the location of the supplier and the place of
supply are in different States, two different union territory or in a state and
union territory Further import of goods and services, supplies to SEZ units or
developer, or any supply that is not an intra state supply. (Section 7 of the
IGST Act).

Q.3. How will the Inter-State supplies of Goods and Services be
taxed under GST?

Answer
IGST shall be levied and collected by Centre on interstate supplies. IGST would
be broadly CGST plus SGST and shall be levied on all inter-State taxable
supplies of goods and services. The inter-State seller will pay IGST on value
addition after adjusting available credit of IGST, CGST, and SGST on his
purchases. The Exporting State will transfer to the Centre the credit of SGST
used in payment of IGST. The Importing dealer will claim credit of IGST while
discharging his output tax liability in his own State. The Centre will transfer
to the importing State the credit of IGST used in payment of SGST. The relevant
information is also submitted to the Central Agency which will act as a
clearing house mechanism, verify the claims and inform the respective governments
to transfer the funds.

Q.4. What are the salient features of the draft IGST Law?

Answer
The draft IGST law contains 25 sections divided into9 Chapters. The law, inter
alia, sets out the rules for determination of the place of supply of goods.
Where the supply involves movement of goods, the place of supply shall be the
location of goods at the time at which the movement of goods terminates for
delivery to the recipient. Where the supply does not involve movement of goods,
the place of supply shall be the location of such goods at the time of delivery
to the recipient. In the case of goods assembled or installed at site, the
place of supply shall be the place of such installation or assembly. Finally,
where the goods are supplied on board a conveyance, the place of supply shall
be the location at which such goods are taken on board. The law also provides
for determination of place of supply of service where both supplier and
recipient are located in India (domestic supplies) or where supplier or recipient
is located outside India (international supplies). This is discussed in details
in the next Chapter. It also provides for certain other specific provisions
like payment of tax by online information and database access service provider
located outside India to an unregistered person in India, upon taking
registration in India, under the IGST Act, following a simplified provision
(section 14 of the IGST Act),

Q.5. What are the advantages of IGST Model?

Answer
The major advantages of IGST Model are: a. Maintenance of uninterrupted ITC
chain on interState transactions, b. No upfront payment of tax or substantial
blockage of funds for the inter-State seller or buyer, c. No refund claim in
exporting State, as ITC is used up while paying the tax, d. Self-monitoring
model, e. Ensures tax neutrality while keeping the tax regime simple, f. Simple
accounting with no additional compliance burden on the taxpayer, g. Would
facilitate in ensuring high level of compliance and thus higher collection
efficiency. Model can handle "Business to Business"as well as
"Business to Consumer"transactions.

Q.6. How will imports/exports be taxed under GST?

Answer
All imports/exports will be deemed as inter-state supplies for the purposes of
levy of GST (IGST). The incidence of tax will follow the destination principle
and the tax revenue in case of SGST will accrue to the State where the imported
goods and services are consumed. Full and complete set-off will be available as
ITC of the IGST paid on import on goods and services. Exports of goods and
services will be zero rated. The exporter has the option either to export under
bond without payment of duty and claim refund of ITC or pay IGST at the time of
export and claim refund of IGST. The IGST on imports is leviable under the
provisions of the Customs Tariff Act and shall be levied at the time of imports
along with the levy of the Customs Act (Section 5 of the IGST Act)

Q.7. How will the IGST be paid?

Answer
The IGST payment can be done utilizing ITC or by cash. However, the use of ITC for
payment of IGST will be done using the following hierarchy, - "First
available ITC of IGST shall be used for payment of IGST, "Once ITC of IGST
is exhausted, the ITC of CGST shall be used for payment of IGST, "If both
ITC of IGST and ITC of CGST are exhausted, then only the dealer would be
permitted to use ITC of SGST for payment of IGST. Remaining IGST liability, if
any, shall be discharged using payment in cash. GST System will ensure
maintenance of this hierarchy for payment of IGST using the credit

Q.8. How will the settlement between Centre, exporting state and
importing state be done?

Answer
There would be settlement of account between the Centre and the states on two
counts, which are as follows- "Centre and the exporting state: The
exporting state shall pay the amount equal to the ITC of SGST used by the
supplier in the exporting state to the Centre. "Centre and the importing
state: The Centre shall pay the amount equal to the ITC of IGST used by a
dealer for payment of SGST on intra- state supplies. The settlement would be on
cumulative basis for a state taking into account the details furnished by all
the dealer in the settlement period. Similar settlement of amount would also be
undertaken between CGST and IGST account.

Q.9. What treatment is given to supplies made to SEZ units or
developer?

Answer
Supplies to SEZ units or developer shall be zero rated in the same manner as
done for the physical exports. Supplier shall have option to make supplies to
SEZ without payment of taxes and claim refunds of input taxes on such supplies
(section 16 of the IGST Act).

Q.10. Are business processes and compliance requirement same in
the IGST and CGST Acts?

Answer
The procedure and compliance requirement are same for processes likes
registration, return filing and payment of tax. Further, the IGST act borrows
the provisions from the CGST Act as relating to assessment, audit, valuation,
time of supply, invoice, accounts, records, adjudication, appeal etc. (Section
20 of the IGST Act)

Q.1. What is the need for the Place of Supply of Goods and
Services under GST?

Answer
The basic principle of GST is that it should effectively tax the consumption of
such supplies at the destination thereof or as the case may at the point of
consumption. So place of supply provision determines the place i.e. taxable
jurisdiction where the tax should reach. The place of supply determines whether
a transaction is intra-state or interstate. In other words, the place of Supply
of Goods or services is required to determine whether a supply is subject to
SGST plus CGST in a given State or union territory or else would attract IGST
if it is an inter-state supply.

Q.2. Why are place of supply provisions different in respect of
goods and services?

Answer
Goods being tangible do not pose any significant problems for determination of
their place of consumption. Services being intangible pose problems w.r.t
determination of place of supply mainly due to following factors: (i) The
manner of delivery of service could be altered easily. For example, telecom
service could change from mostly post-paid to mostly pre-paid, billing address
could be changed, billers address could be changed, repair or maintenance of
software could be changed from onsite to online, banking services were earlier
required customer to go to the bank, now the customer could avail service from
anywhere, (ii) Service provider, service receiver and the service provided may
not be ascertainable or may easily be suppressed as nothing tangible moves and
there would hardly be a trail, (iii) For supplying a service, a fixed location
of service provider is not mandatory and even the service recipient may receive
service while on the move. The location of billing could be changed overnight,
(iv) Sometime the same element may flow to more than one location, for example,
construction or other services in respect of a railway line, a national highway
or a bridge on a river which originate in one state and end in the other state.
Similarly, a copy right for distribution and exhibition of film could be
assigned for many states in single transaction or an advertisement or a
programme is broadcasted across the country at the same time. An airline may issue
seasonal tickets, containing say 10 leafs which could be used for travel
between any two locations in the country. The card issued by Delhi metro could
be used by a person located in Noida, or Delhi or Faridabad, without the Delhi
metro being able to distinguish the location or journeys at the time of receipt
of payment, (v) Services are continuously evolving and would thus continue to
pose newer challenges. For example, 15-20 years back no one could have thought
of DTH, online information, online banking, online booking of tickets,
internet, mobile telecommunication etc.

Q.3. What proxies or assumptions in a transaction can be used to
determine the place of supply?

Answer
The various element involved in a transaction in services can be used as
proxies to determine the place of supply. An assumption or proxy which gives
more appropriate result than others for determining the place of supply, could
be used for determining the place of supply. The same are discussed below: (a)
location of service provider, (b) the location of service receiver, (c) the
place where the activity takes place/ place of performance, (d) the place where
it is consumed, and (e) the place/person to which actual benefit flows

Q.4. What is the need to have separate rules for place of supply
in respect of B2B (supplies to registered persons) and B2C (supplies to
unregistered persons) transactions?

Answer
In respect of B2B transactions, the taxes paid are taken as credit by the
recipient so such transactions are just pass through. GST collected on B2B
supplies effectively create a liability for the government and an asset for the
recipient of such supplies in as much as the recipient is entitled to use the
input tax credit for payment of future taxes. For B2B transactions the location
of recipient takes care in almost all situations as further credit is to be
taken by recipient. The recipient usually further supplies to another customer.
The supply is consumed only when a B2B transaction is further converted into
B2C transaction. In respect of B2C transactions, the supply is finally consumed
and the taxes paid actually come to the government.

Q.5. What would be the place of supply where goods are removed?

Answer
The place of supply of goods shall be the location of the goods at the time at
which the movement of goods terminates for delivery to the recipient. (Section
10 of IGST Act)

Q.6. What will be the place of supply if the goods are delivered
by the supplier to a person on the direction of a third person?

Answer
It would be deemed that the third person has received the goods and the place
of supply of such goods shall be the principal place of business of such
person. (Section 9 of IGST Act)

Q.7. What will be the place of supply where the goods or services
are supplied on board a conveyance, such as a vessel, an aircraft, a train or a
motor vehicle?

Answer
In respect of goods, the place of supply shall be the location at which such
goods are taken on board. (Section 9 of IGST Act) However, in respect of
services, the place of supply shall be the location of the first scheduled
point of departure of that conveyance for the journey. (Section 12 and 13 of
IGST Act)

Q.8. What is the default presumption for place of supply in
respect of B2B supply of services?

Answer
The terms used in the IGST Act are registered taxpayers and non-registered
taxpayers. The presumption in case of supplies to registered person is the
location of such person. Since the recipient is registered, address of
recipient is always there and the same can be taken as proxy for place of
supply

Q.9. What is the default presumption for place of supply in
respect of unregistered recipients?

Answer
In respect of unregistered recipients, the usual place of supply is location of
recipient. However, in many cases, the address of recipient is not available,
in such cases, location of the supplier of services is taken as proxy for place
of supply.

Q.10. The place of supply in relation to immovable property is the
location of immovable property. Suppose a road is constructed from Delhi to Mumbai
covering multiple states. What will be the place of supply?

Answer
Where the immovable property is located in more than one State, the supply of
service shall be treated as made in each of the States in proportion to the
value for services separately collected or determined, in terms of the contract
or agreement entered into in this regard or, in the absence of such contract or
agreement, on such other reasonable basis as may be prescribed in this behalf.
(The Explanation clause to section 12(3) of the IGST Act, for domestic
supplies)

Q.11. What would be the place of supply of services provided for
organizing an event, say, IPL cricket series which is held in multiple states?

Answer
In case of an event, if the recipient of service is registered, the place of
supply of services for organizing the event shall be the location of such
person. However, if the recipient is not registered, the place of supply shall
be the place where event is held. Since the event is being held in multiple
states and a consolidated amount is charges for such services, the place of
supply shall be taken as being in each state in proportion to the value of
services so provided in each state. (The Explanation clause to section 12(7) of
the IGST Act)

Q.12. What will be the place of supply of goods services by way of
transportation of goods, including mail or courier?

Answer
In case of domestic supply: If the recipient is registered, the location of
such person shall be the place of supply. However, if the recipient is not
registered, the place of supply shall be the place where the goods are handed
over for transportation (section 12 of the IGST Act. For international
supplies: The place of supply of transport services, other than the courier
services, shall be the destination of goods. For courier, the place of supply
of services is where goods are handed over to courier. However, if the courier
services are performed even partially in India, the place of supply shall be
deemed as India (section 13(3),13(6) and 13(9) of the IGST Act).

Q.13. What will be the place of supply of passenger transportation
service, if a person travels from Mumbai to Delhi and back to Mumbai?

Answer
If the person is registered, the place of supply shall be the location of
recipient. If the person is not registered, the place of supply for the forward
journey from Mumbai to Delhi shall be Mumbai, the place where he embarks.
However, for the return journey, the place of supply shall be Delhi as the
return journey has to be treated as separate journey. (The Explanation clause
to section 12(9) of the IGST Act)

Q.14. Suppose a ticket/ pass for anywhere travel in India is
issued by M/s Air India to a person. What will be the place of supply?

Answer
In the above case, the place of embarkation will not be available at the time
of issue of invoice as the right to passage is for future use. Accordingly,
place of supply cannot be the place of embarkation. In such cases, the default
rule shall apply. (The proviso clause to section 12(9) of the IGST Act)

Q.15. What will be the place of supply for mobile connection? Can
it be the location of supplier?

Answer
For domestic supplies: The location of supplier of mobile services cannot be
the place of supply as the mobile companies are providing services in multiple
states and many of these services are inter-state. The consumption principle
will be broken if the location of supplier is taken as place of supply and all
the revenue may go to a few states where the suppliers are located. The place
of supply for mobile connection would depend on whether the connection is on
postpaid or prepaid basis. In case of postpaid connections, the place of supply
shall be the location of billing address of the recipient of service. In case
of pre-paid connections, the place of supply shall be the place where payment
for such connection is received or such pre-paid vouchers are sold. However, if
the recharge is done through internet/e-payment, the location of recipient of
service on record shall be the taken as the place of service. For international
supplies: The place of supply of telecom services is the location of the
recipient of service.

Q.16. A person in Goa buys shares from a broker in Delhi on NSE
(in Mumbai). What will be the place of supply?

Answer
. The place of supply shall be the location of the recipient of services on the
records of the supplier of services. So Goa shall be the place of supply

Q.17. A person from Mumbai goes to Kullu-Manali and takes some
services from ICICI Bank in Manali. What will be the place of supply?

Answer
If the service is not linked to the account of person, place of supply shall be
Kullu i.e. the location of the supplier of services. However, if the service is
linked to the account of the person, the place of supply shall be Mumbai, the
location of recipient on the records of the supplier.

Q.18. A person from Gurgaon travels by Air India flight from
Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the
place of supply?

Answer
The location of the recipient of services on the records of the supplier of
insurance services shall be the place of supply. So Gurgaon shall be the place
of supply. (proviso clause to section 11(13) of the IGST Act)

Answer
Goods and Services Tax Network (GSTN) is a not-forprofit, non-government
company promoted jointly by the Central and State Governments, which will
provide shared IT infrastructure and s e r v i c e s t o b o t h c e n t r a l
and state governments including tax payers and other stakeholders. The Frontend
services of Registration, Returns, Payments, etc. to all taxpayers will be
provided by GSTN. It will be the interface between the government and the
taxpayers.

Q.2. What was need to create GSTN?

Answer
The GST System Project is a unique and complex IT initiative. It is unique as
it seeks, for the first time to establish a uniform interface for the tax payer
and a common and shared IT infrastructure between the Centre and States.
Currently, the Centre and State indirect tax administrations work under
different laws, regulations, procedures and formats and consequently the IT
systems work as independent sites. Integrating them for GST implementation
would be complex since it would involve integrating the entire indirect tax
ecosystem so as to bring all the tax administrations (Centre, State and Union
Territories) to the same level of IT maturity with uniform formats and
interfaces for taxpayers and other external stakeholders. Besides, GST being a
destination based tax, the inter- state trade of goods and services (IGST)
would need a robust settlement mechanism amongst the States and the Centre.
This is possible only when there is a strong IT Infrastructure and Service back
bone which enables capture, processing and exchange of information amongst the
stakeholders (including taxpayers, States and Central Government, Bank and
RBI). To achieve these objectives GSTN was created.

Q.3. What is the genesis of GSTN?

Answer
Requirements of strong IT Infrastructure was discussed in the 4th meeting of
2010 of the Empowered Committee of State Finance Ministers held on 21/7/2010.
In the said meeting the EC approved creation of an "Empowered Group on IT
Infrastructure for GST"(referred to as EG) under the chairmanship of Dr.
Nandan Nilekani with Additional Secretary (Rev), Member (B&C) CBEC, DG
(Systems), CBEC, FA Ministry of Finance, Member Secretary EC and five state
commissioners of Trade Taxes (Maharashtra, Assam, Karnataka, West Bengal and
Gujarat) as members. The Group was mandated to suggest, inter alia, the
modalities for setting up a National Information Utility (NIU/ SPV) for
implementing the Common Portal to be called GST Network (GSTN) and recommend
the structure and terms of reference for the NIU/ SPV, detailed implementation
strategy and the road map for its creation in addition to other items like
training, outreach etc. In March 2010, TAGUP constituted by the Ministry of
Finance had recommended that National Information Utilities should be set up as
private companies with a public purpose for implementation of large and complex
Government IT projects including GST. Mandate of TAGUP was to examine the
technological and systemic issues relating to the various IT projects such as GST,
TIN, NPS, etc. The EG had seven meetings between 2nd August 2010 and 8th August
2011 to discuss the modalities. After due deliberations, the EG recommended
creation of a Special Purpose Vehicle for implementing the GST System Project.
To enable efficient and reliable provision of services in a demanding
environment, the EG recommended a nonGovernment structure for the GSTN SPV with
Government equity of 49% (Centre "24.5% and States "24.5%) after
considering key parameters such as independence of management, strategic
control of Government, flexibility in organizational structure, agility in
decision making and ability to hire and retain competent human resources. In
view of the sensitivity of the role of GSTN and the information that would be
available with it, the EG also considered the issue of strategic control of
Government over GSTN. The Group recommended that strategic control of the
Government over the SPV should be ensured through measures such as composition
of the Board, mechanisms of Special Resolution and Shareholders Agreement,
induction of Government officers on deputation, and agreements between GSTN SPV
and Governments. Also, the shareholding pattern would ensure that the Centre
individually and States collectively are the largest stakeholders at 24.5%
each. In combination, the Government shareholding at 49% would far exceed that
of any single private institution. EG also brought out the need to have
technology specification to run this company so that there is 100 percent
matching of returns. The business knowledge resides with the officials of
Government of India and States. However, professionals with sophisticated
technology knowledge will be required to run this company independently,
similar to NSDL which is working professionally and independently. EG also
recommended a non-government company as that will have operational freedom.
These recommendations were presented before the Empowered Committee of State
Finance Ministers in its 3rd meeting of 2011 held on 19th August 2011 and in
the 4th meeting of 2011 of the EC held on 14th Oct 2011. The proposal of the EG
on IT infrastructure for GST regarding GSTN and formation of a not-for-profit
section 25 company with the strategic control of the Government were approved
by the Empowered Committee of State Finance Ministers (EC) in its meeting held
on14.10.11. The note of Department of Revenue for setting up a Special Purpose
Vehicle to be called Goods and Services Tax Network (GSTN-SPV) on the lines
mentioned above was considered by the Union Cabinet on 12th April 2012 and
approved. The Union cabinet also approved the following: i. Suitable and
willing non-government institutions will be identified and firmed up by the
Ministry of Finance to invest in GSTN-SPV prior to its incorporation. ii. The strategic
control of the Government over the SPV would be ensured through measures such
as composition of the Board, mechanisms of Special Resolution and Shareholders
Agreement, induction of Government officers on deputation, and agreements
between GSTN SPV and Governments. iii. The Board of Directors of GSTN SPV would
comprise 14 Directors with 3 Directors from the Centre, 3 from the States, a
Chairman of the Board of Directors appointed through a joint approval mechanism
of Centre and States, 3 Directors from private equity stake holders, 3
independent Directors who would be persons of eminence and a CEO of the GSTN
SPV selected through an open selection process. iv. Relaxation in relevant
rules to enable deputation of Government officers to the GSTN SPV for exercise
of strategic control and for bringing in necessary domain expertise. v. GSTN
SPV would have a self- sustaining revenue model, where it would be able to levy
user charges on the tax payers and the tax authorities availing services. vi.
GSTN SPV to be the exclusive national agency responsible for delivering
integrated indirect Tax related services involving multiple tax authorities.
Accordingly, any other service provider seeking to deliver similar integrated
services would be required to enter into a formal arrangement with GSTN SPV for
the services. vii. A one- time non- recurring Grant- in aid of Rs. 315 crores
from the Central Government towards functioning of the SPV for a three- y e ar
period after incorporation.

Q.4. What is the equity structure and Revenue Model of GSTN?

Answer
(a) Equity Structure: - In compliance of the Cabinet decision, GST Network was
registered as a not-for-profit, non-Government, private limited company under
section 8 of the Companies Act, 1956 with the following equity structure:

Answer
In GST regime, while taxpayer facing core services of applying for
registration, uploading of invoices, filing of return, making tax payments
shall be hosted by GST System, all the statutory functions(such as approval of
registration, assessment of return, conducting investigation and audit etc.)
shall be conducted by the tax authorities of States and Central governments.
Thus, the frontend (GST Portal services) shall be provided by GSTN and the
backend modules shall be developed by states and Central Government themselves.
However, 27 states (termed as Model-2 states) have asked GSTN to develop their
backend modules also. The CBEC and rest of the 9 states (Model 1) have decided
to develop and host the back-end modules themselves. For Model 1 states/ CBEC
full data (registration, return, payment etc.) submitted by taxpayers will be
shared with them for information and analysis as deemed fit by them.

Q.7. What will be the role of GSTN in registration?

Answer
The application for Registration will be made Online on GST Portal. Some of the
key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable)
will be validated by the GST Portal online with the respective agency i.e.
CBDT, UID, MCA etc., thereby ensuring minimum need for submission of documentation.
The a p p l i c a t i o n d a t a along with s u p p o r t i n g s c a n n e d
d o c u m e n t s shall be sent by GSTN to states/ Centre, which in turn shall
send the query, if any, o r approval or rejection intimation and digitally
signed registration to GSTN for eventual download by the taxpayer.

Q.8. What is the role of Infosys in GSTN?

Answer
GSTN has engaged M/S Infosys as a single Managed Service Provider (MSP) for the
design, development and deployment of GST system, including all application software,
tools and Infrastructure and for operating & maintaining the system for a
period of 5 years from the Go-Live date.

Answer
A common GST system will provide linkage to all State/UT Commercial Tax
departments, Central Tax authorities, Taxpayers, Banks and other stakeholders.
The eco-system consists of all stakeholders starting from taxpayer to tax
professional to tax officials to GST portal to Banks to accounting authorities.

Q.11. What is GSP (GST Suvidha Provider)?

Answer
GST System will provide a GST portal for taxpayers to access the GST System and
do all the GST compliance activities. But there will be wide variety of tax
payers (SME, Large Enterprise, Micro Enterprise etc.) which may require
different kind of facilities like converting their purchase/sales register data
in GST compliant format, Integration of their Accounting Packages/ERP with GST
System etc., various kind of dashboards to view Matched/Mismatched ITC claims,
Tax liability, Filing status etc. As invoice level filing is required, so large
organizations may require an automated way to interact with GST system as it
may be practically impossible for them to upload large number of invoices
through a web portal. So an eco- system is required, which can help such
taxpayers in GST compliance. As Tax payer convenience will be the key to
success of GST regime, this eco-system will also provide Tax payer options of
using third party applications, which can provide different kind of interfaces
on desktop/mobile for them to be GST compliant. All above reasons require an
eco-system of third party service providers, who have access to GST System and
capability to develop such applications. These service providers have been
given a generic name, GST Suvidha Providers or GSP.

Q.12. What will be the role of GST Suvidha Providers (GSP)?

Answer
GSP will be developing applications having features like return filing,
reconciliation of purchase register data with auto populated data for
acceptance/rejection/Modification, dashboards for taxpayers for quick
monitoring of GST compliance activities. they may also provide role based
access to divide various GST related activities like uploading invoice, filing
returns etc., among different set of users inside a company (medium or large
companies will need it), Applications for Tax Professional to manage their
client"s GST compliance activities, Integration of existing accounting
packages/ERP with GST System, etc.

Q.13. What are the benefits to taxpayers in using the GSPs?

Answer
At the outset it is clarified that all required functions under GST can be
performed by a taxpayer at the GST portal. GSP is an additional channel being
made available for performing some of the functions and use of their services
is optional. Some of the specific solution(s) which could be offered by the
GSPs to meet specific requirements of Taxpayers for GST compliance are given
below: 1. Conversion of their current invoice format generated by their existing
accounting software, which could be in csv, pdf, excel, word format, into GST
compliant format. 2. Reconciliation of auto populated data from GST portal with
their purchase register data, where purchase register data can be on excel, csv
or in any proprietary database and uploaded data from GST format could be in
json/csv. 3. Organization having various branches will need a way to upload
branch wise invoices, as GST System will only provide one user-id/password for
GST system access. An application having role based access and different view
for different branches will be needed. 4. A company registered in multiple
States may require unified view of all branches in one screen, 5. GST
professionals will need some specific applications to manage and undertake GST
compliance activities for their client Tax payers from one dashboard, etc.
Above are just a few illustrations. There will be many more requirements of
different sets of Tax payers. These requirements of taxpayers can be met by
GSPs.

Q.14. What are the functions which a taxpayer will perform at the
GST Common Portal being developed and maintained by GSTN for the taxpayers?

Answer
GST Common Portal is envisaged as one -stop- shop for all requirements under
GST for the taxpayers. Illustrative list of functions that can be performed by
taxpayers through GST Portal managed by GSTN are: "Application for
registration as well as amendment in registration, cancellation of registration
and profile management, "Payment of taxes, including penalties, fines,
interest, etc. (in terms of creation of Challan as payment will take place at
bank"s portal or inside a bank premises), "Change of status of a
taxpayer from normal to Compounding and vice-versa, "Uploading of Invoice
data & filing of various statutory returns/Annual statements, "Track
status of return/tax ledger/cash ledger etc. using unique Application Reference
Number (ARN) generated on GST Portal. "File application for refund etc.
"Status review of return/tax ledger/cash ledger

Q.15. What will be the role of tax officers from State and Central
Govt in respect of the GST system being developed by GSTN?

Q.16. Will GSTN generate a unique identification for each invoice
line in GSTN system?

Answer
No, GSTN will not generate any new identification. The combination of
Supplier"s GSTIN, Invoice no and Financial year will make each Invoice
unique.

Q.17. Can invoice data be uploaded on day to day basis?

Answer
Yes, GST Portal will have functionality for taxpayers to upload invoice data on
any time basis. Early upload of invoices by supplier taxpayer will help
receiver taxpayer in early reconciliation of data in Invoices as well as help
supplier taxpayer in avoiding last minute rush of uploading returns on the last
day.

Answer
Yes, GSTN will provide spreadsheet like tools (such as Microsoft Excel), free
of cost, to taxpayers to enable them to compile invoice data in the same and
generate files which can then be uploaded on GST portal. This will be an
offline tool which can be used to input/capture invoice data without being
online and then generate final files in compatible format for uploading to GST
portal

Q.19. Will GSTN be providing mobile based Apps to view ledgers and
other accounts?

Answer
The GST portal is being designed in such a way that it can be seen on any smart
phone. Thus ledgers like cash ledger, liability ledger, ITC ledger etc. can be
seen on a mobile phone using compatible browsers.

Q.20. Will GSTN provide separate user ID and password for GST
Practitioner to enable them to work on behalf of their customers (Taxpayers)
without requiring user ID and password of taxpayers, as happens today?

Answer
Yes, GSTN will be providing separate user ID and Password to GST Practitioner
to enable them to work on behalf of their clients without asking for their user
ID and passwords. They will be able to do all the work on behalf of taxpayers
as allowed under GST Law.

Q.21. Will tax payer be able to change the GST Practitioner once
chosen in above mentioned facility?

Answer
Yes, a taxpayer may choose a different GST Practitioner by simply unselecting
the previous one and then choosing a new GST Practitioner on the GST portal.

Q.22. Will existing taxpayers under Central Excise or Service Tax
or State VAT have to apply for fresh registration under GST?

Answer
No, the existing taxpayers under taxes which are to be subsumed under GST and
whose PAN have been validated from CBDT database will not be required to apply
afresh. They will be issued provisional GSTIN by GST portal, which will be
valid for six months. Such taxpayers will be required to provide relevant data
as per GST enrollment form online on GST Portal. On completion of data filing the
status of taxpayer will change to Migrated. On appointed day the status of
taxpayer will change to Active and he will be able to comply with requirements
of GST regime for payment of taxes, filing of returns etc., on GST Portal. GSTN
has issued Provisional IDs and passwords to all such taxpayers and the same has
been shared with tax authorities for conveying the same to the taxpayers.
Enrolment of existing taxpayers for GST started at GST portal on 8th November
2016 and by end of March 2017 a large number of them have activated the
Provisional ID and many have completed the migration process. More details are
available at https://www.gst.gov.in/help

Q.23. What material will be provided by GSTN, on various aspects
of working on GST portal, for the benefit of taxpayers?

Answer
GSTN is preparing Computer Based Training materials (CBT"s) which have
videos embedded into them for each process to be performed on the GST portal.
These will be put on the GST portal as well as on the website of all tax
authorities. Apart from CBT"s, Various User Manuals, FAQ"s etc., will
also be placed on GST Portal for education of the taxpayers. Apart from it, a
helpdesk has been set up for the taxpayers for logging of their tickets via
mail (helpdesk@gst.gov.in) or phone (0124-4688999). CBT, FAQ and User Manual
for enrolment process are available at https://www.gst.gov.in/help.

Q.24. Willthe return and registration data furnished by the
taxpayers on the GST Common Portal will remain Confidential?

Answer
Yes, all steps are being taken by GSTN to ensure the confidentiality of
personal and business information furnished by the taxpayers on GST Common
Portal. This will be done by ensuring Role Based Access Control (RBAC) and
encryption of critical data of taxpayers both during transit and in storage.
Only the authorized tax authorities will be able to see and read the data.

Q.25. What are the security measures being taken by GSTN to ensure
security of the GST system?

Answer
GST Systems project has incorporated state of art security framework for data
and service security. Besides high end firewalls, intrusion detection, data
encryption at rest as well as in motion, complete audit trail, tamper proofing
using consistent hashing algorithms, OS and host hardening etc., GSTN is also
establishing a primary and secondary Security Operations Command & Control
center, which will proactively monitor and protect malicious attack in real
time. GSTN is also ensuring secure coding practices through continuous scanning
of source code & libraries being used in GST system to protect against
commonly known and unknown threats.

Q.1. Will CENVAT credit (or VAT credit) carried forward in the
last return prior to GST under existing law be available as ITC under GST?

Answer
A registered person, other than a person opting to pay tax under composition
scheme, shall be entitled to take credit in his electronic credit ledger the
amount of CENVAT (or VAT credit) credit carried forward in the return of the
last period before the appointed day, subject to the conditions stated therein.
(Section 140(1) of the CGST/SGST Act)

Q.2. What are those conditions?

Answer
The conditions are that: - (i) the said amount of credit is admissible as input
tax credit under this Act, (ii) the registered person has furnished all the
returns required under the existing law (i.e. Central Excise and VAT) for the
period of six months immediately preceding the appointed date, (iii) the said
amount of credit does not relate to goods sold under notifications no.
""and claiming refund of VAT paid thereon Under SGST law there will
be one more condition as given below: - So much of the said credit as is
attributable to any claim related to section 3, sub-section (3) of section 5,
section 6, section 6A or sub-section (8) of section 8 of the Central Sales Tax
Act, 1956 that is not substantiated in the manner, and within the period,
prescribed in rule 12 of the Central Sales Tax (Registration and Turnover)
Rules, 1957 shall not be eligible to be credited to the electronic credit
ledger: However, an amount equivalent to the credit specified above shall be
refunded under the existing law when the said claims are substantiated in the
manner prescribed in rule 12 of the Central Sales Tax (Registration and
Turnover) Rules, 1957.

Q.3. A registered person, say, purchases capital goods under the
existing law (Central Excise) in the June quarter of 2017-18. Though the
invoice has been received within 30th June but the capital goods are received
on 5th July, 2017 (i.e. in GST regime). Will such a person get full credit of
CENVAT in GST regime?

Answer
Yes, he will be entitled to credit in 2017-18 provided such a credit was
admissible as CENVAT credit in the existing law and is also admissible as
credit in CGST - section 140(2) of the CGST Act.

Q.4. VAT credit was not available on items ^X^ & ^Y^ as
capital goods in the existing law (Central Excise). Since they are covered in
GST, can the registered taxable person claim it now?

Answer
He will be entitled to credit only when ITC on such goods are admissible under
the existing law and is also admissible in GST. Since credit is not available
under the existing law on such goods, the said person cannot claim it in GST
"proviso to section 140(2) of the SGST Act.

Q.5. Assuming the registered person has wrongly enjoyed the credit
(Refer to Q4) under the existing law, will the recovery be done under the GST
Law or the existing law?

Answer
The recovery relating to ITC wrongfully enjoyed, unless recovered under the
existing law, will be recovered as arrears of tax under GST

Q.6. Give two examples of registered taxable persons who are not
liable to be registered under the existing law (Central Excise / VAT) but are
required to be registered under GST?

Answer
A manufacturer having a turnover of say Rs 60 lakh who is enjoying SSI
exemption under the existing law will have to be registered under GST as the
said turnover exceeds the basic threshold of Rs 20 lakh - section 22. A trader
having turnover below the threshold under VAT but, making sales through
e-commerce operator will be required to be registered in GST. There will be no
threshold for such person(s) "section 24.

Q.7. Will ITC be allowed to a service provider on VAT paid inputs
held as stock on the appointed day?

Answer
Yes, he will be entitled to input tax credit on inputs held in stock in
accordance with the provisions of section 140(3)

Q.8. A registered person has excess ITC of Rs 10, 000/- in his
last VAT return for the period immediately preceding the appointed day. Under
GST he opts for composition scheme. Can he carry forward the aforesaid excess
ITC to GST?

Answer
The registered person will not be able to carry forward the excess ITC of VAT
to GST if he opts for composition scheme "Section 140(1).

Q.9. Sales return under CST (i.e. Central Sales Tax Act) is
allowable as deduction from the turnover within six months? If, say, goods are
returned in GST regime by a buyer within six months from appointed day, will it
become taxable in GST?

Answer
Where tax has been paid under the existing law [CST, in this case] on any goods
at the time of sale, not being earlier than six months prior to the appointed
day, and such goods are returned by the buyer after the appointed day, the
sales return will be considered as a supply of the said buyer in GST and tax
has to be paid on such supply, if, "(i) the goods are taxable under the
GST Law, and (ii) the buyer is registered under the GST Law. However, the
seller is entitled to refund of such tax [CST, in this case] paid under the
existing law if the aforesaid buyer is an unregistered person under GST and the
goods are returned within 06(six) months (or within the extended period of
maximum two months) from the appointed day and the goods are identifiable - Section
142(1).

Q.10. Shall a manufacturer or a job worker become liable to pay
tax if the inputs or semi-finished goods sent for job work under the existing
law are returned after completion of job work after the appointed day?

Answer
No tax will be payable by the manufacturer or the job worker under the
following circumstances: "(i) Inputs/ semi-finished goods are sent to the
job worker in accordance with the provisions of the existing law before the
appointed day. (ii) The job worker returns the same within six months from the
appointed day (or within the extended period of maximum two months). (iii) Both
the manufacturer and the job worker declare the details of inputs held in stock
by the job worker on the appointed day in the prescribed form. The relevant sections
are 141(1), 141(2) & 141 (4). However, if the said inputs/semi- finished
goods are not returned within six months (or within the extended period of
maximum two months), the input tax credit availed is liable to be recovered.

Q.11. What happens if the job worker does not return the goods
within the specified time?

Answer
Tax will be payable by the job worker on the said goods if they are not
returned to the place of business of the manufacturer within six months (or
within the extended period of maximum two months) from the appointed day
"Section 141(1), 141(2)

Q.12. Can a manufacturer transfer have finished goods sent for
testing purpose to the premises of any other taxable person?

Answer
Yes, a manufacturer can transfer finished goods sent for testing purpose to the
premise of any other registered person on payment of tax in India or without
payment of tax for exports within six months (or within the extended period of
maximum two months)"section 141(3)

Q.13. If finished goods removed from a factory for carrying out
certain processes under existing law are returned on or after the appointed
day, whether GST would be payable?

Answer
No tax under GST will be payable if finished goods removed from factory prior
to the appointed day to any other premise for carrying out certain processes
are returned to the said factory after undergoing tests or any other process
within six months (or within the extended period of maximum two months) from
the appointed day - section 141(3).

Q.14. When tax shall become payable in GST on manufactured goods
sent to a Job worker for carrying out tests or any other process not amounting
to manufacture under the existing law?

Answer
Tax will be payable in GST on manufactured goods sent to a job worker prior to
the appointed day for carrying out tests or any process not amounting to
manufacture under the existing law if such goods are not returned to the
manufacturer within six months (or within the extended period of maximum two
months) from the appointed day. Further, the input tax credit enjoyed by the
manufacturer will liable to be recovered if the aforesaid goods are not
returned within six months from the appointed day. "Section 141(3)

Q.15. Is extension of two months as discussed in section 141
automatic?

Answer
No, it is not automatic. It may be extended by the Commissioner on sufficient
cause being shown.

Q.16. What is the time limit for issue of debit/credit note(s) for
revision of prices?

Answer
The taxable person may issue the debit/credit note(s) or a supplementary invoice
within 30 days of the price revision. In case where the price is revised
downwards the taxable person will be allowed to reduce his tax liability only
if the recipient of the invoice or credit note has reduced his ITC
corresponding to such reduction of tax liability"section 142(2).

Q.17. What will be the fate of pending refund of tax/interest
under the existing law?

Answer
The pending refund claims will be disposed of in accordance with the provisions
of the existing law "section 142(3).

Q.18. What will be fate of any appeal or revision relating to a
claim of CENVAT/ITC on VAT which is pending under the existing law? If say, it
relates to output liability then?

Answer
Every proceeding of appeal, revision, review or reference relating to a claim
for CENVAT/input tax credit or any output tax liability initiated whether
before, on or after the appointed day, will be disposed of in accordance with
the existing law and any amount of credit of CENVAT/ input tax credit or output
tax found admissible for refund will have to be refunded in accordance with the
existing law. However, any amount which becomes recoverable will have to be
recovered as arrears of tax under the GST Law---Section 142(6)/142(7).

Q.19. If the appellate or revisional order goes in favour of the
assessee, whether refund will be made in GST? What will happen if the decision
goes against the assessee?

Answer
The refund will be made in accordance with the provisions of the existing law
only. In case any recovery is to be made then, unless recovered under existing
law, it will be recovered as an arrear of tax under GST "sections 142(6)
& 142(7)

Q.20. How shall the refund arising from revision of return(s)
furnished under the existing law be dealt in GST?

Answer
Any amount found to be refundable as a consequence of revision of any return
under the existing law after the appointed day will be refunded in cash in
accordance with the provisions of the existing law "section 142(9)(b).

Q.21. If any goods or services are supplied in GST, in pursuance
of contract entered under existing law, which tax will be payable?

Answer
GST will be payable on such supplies"section 142(10) of the CGST Act.

Q.22. Tax on a particular supply of goods/services is leviable
under the existing law. Will GST be also payable if the actual supply is made
in GST regime?

Answer
No tax will be payable on such supply of goods/services under GST to the extent
the tax is leviable under the existing law "section 142(11).

Q.23. In pursuance of any assessment or adjudication proceedings
instituted, after the appointed day, under the existing law, an amount of tax,
interest, fine or penalty becomes refundable. Shall such amount be refundable
under the GST law?

Answer
No refund of such amount will be made in cash under the existing law
"section 142(8)(b) of the CGST Act.

Q.24. If services are received by ISD under the earlier law, can
the ITC relating to it be distributed in GST regime?

Answer
Yes, irrespective of whether the invoice(s) relating to such services is
received on or after the appointed day "section 140(7) of the CGST Act.

Q.25. Where any goods are sold on which tax was required to be
deducted at source under State VAT law and an invoice was also issued before
the appointed day, shall deduction of tax at source shall be made under this
Act if the payment is made after the appointed day?

Answer
No, in such case no deduction of tax at source shall be made under GST.

Q.26. Goods were sent on approval not earlier than six months
before the appointed day but are returned to the seller after 6 months from the
appointed day, will tax be payable under GST?

Answer
Yes, if such goods are liable to tax under GST and the person who has rejected
or has not approved the goods, returns it after 6 months (or within the
extended period of maximum two months) from the appointed day. In that case tax
shall also be payable by the person who has sent the goods on approval basis-
section 142(12).